FPQP® Module 7 Exam Review Questions and A+ Level Pass
Rate Solutions Latest 2025/2026
What is the limit on contributions to a traditional IRA for a single person who earns
$1,500 per year? - correct answer 1,500
For those who earn less than $6,000 annually, contributions can be made up to the
lesser of $6,000 or 100% of earned income. Therefore, if a person earned only $1,500
in a year, the most the person could contribute to an IRA would be $1,500.
What is the deadline for making contributions to a traditional IRA in the current year? -
correct answer April 15 of the following year
Which of these is an important reason to begin saving early for retirement? - correct
answer A)
To take advantage of current stock market returns
B)
To build a large reserve that can be accessed now via retirement plan loans
C)
To reduce current and future taxes
D)
To maximize compound growth over time
D- A key reason to begin saving early for retirement is to take full advantage of
compound interest growth over time. The longer the compounding period, the higher the
returns.
Which of these combined demographic groups comprise the largest percentage of the
U.S. population? - correct answer Millennials and Gen Xers
B)
Baby boomers and Gen Xers
C)
,Gen Xers and Gen Zers
D) Baby boomers and millennials
D-
Which of the following statements regarding retirement benefits or retirement trends is
CORRECT?
- There is an increasing trend toward employee contributory plans.
- Social Security is a funded system with savings accounts for worker contributions. -
correct answer 1 ONLY
There is an increasing trend toward employee contributory plans such as 401(k)s.
Pension plans that offer guarantees and are fully funded by the employer have
decreased significantly. Employees are now being enrolled in profit-sharing plans, which
provide lower benefit amounts, along with 401(k) or other similar plans [such as 403(b)
plans for nonprofits], which may or may not offer company matches of employee
contributions. Savings accounts are not set up for Social Security contributors.
Roland, age 60, has made deposits totaling $18,000 into a Roth IRA account. The
account is now worth $24,500. He withdraws $10,500 to purchase a car. How much of
this withdrawal is taxable? - correct answer 0
Principal is considered to be withdrawn first from a Roth IRA, meaning Roland could
have withdrawn up to $18,000 without tax consequences.
Funds used for which of the following is an exception from the 10% early withdrawal
penalty that applies to all retirement plans? - correct answer A)
First-time home purchase of up to $10,000
B)
Total and permanent disability of the account owner
C)
Higher education costs
, D)
Business expenses
B-Death and disability are exceptions from the 10% early withdrawal penalty for all
retirement plans. The exceptions for higher education costs and first-time home
purchases of up to $10,000 only apply to IRA accounts. Funds used for business
expenses are not listed as an exception for any retirement plan.
Assume that a worker's Social Security full retirement age is 67, and the worker retires
and starts drawing Social Security early at age 64. What are the consequences? -
correct answer The worker receives a reduced benefit for the rest of his life.
If a worker starts drawing Social Security retirement benefits early (as early as age 62 is
allowed), then he will receive a reduced benefit for life. Like all benefits, this reduced
benefit will be adjusted for inflation each year.
To be eligible for Social Security retirement benefits, an individual must be - correct
answer currently insured and at least age 67.
B)
either currently or fully insured.
C)
currently insured.
D)
fully insured.
D
Which of these statements regarding age 72 minimum distribution requirements is
CORRECT? - correct answer A)
A deductible IRA owner must pay a 50% penalty tax on any required minimum
distributions (RMDs) not taken.
B)
Rate Solutions Latest 2025/2026
What is the limit on contributions to a traditional IRA for a single person who earns
$1,500 per year? - correct answer 1,500
For those who earn less than $6,000 annually, contributions can be made up to the
lesser of $6,000 or 100% of earned income. Therefore, if a person earned only $1,500
in a year, the most the person could contribute to an IRA would be $1,500.
What is the deadline for making contributions to a traditional IRA in the current year? -
correct answer April 15 of the following year
Which of these is an important reason to begin saving early for retirement? - correct
answer A)
To take advantage of current stock market returns
B)
To build a large reserve that can be accessed now via retirement plan loans
C)
To reduce current and future taxes
D)
To maximize compound growth over time
D- A key reason to begin saving early for retirement is to take full advantage of
compound interest growth over time. The longer the compounding period, the higher the
returns.
Which of these combined demographic groups comprise the largest percentage of the
U.S. population? - correct answer Millennials and Gen Xers
B)
Baby boomers and Gen Xers
C)
,Gen Xers and Gen Zers
D) Baby boomers and millennials
D-
Which of the following statements regarding retirement benefits or retirement trends is
CORRECT?
- There is an increasing trend toward employee contributory plans.
- Social Security is a funded system with savings accounts for worker contributions. -
correct answer 1 ONLY
There is an increasing trend toward employee contributory plans such as 401(k)s.
Pension plans that offer guarantees and are fully funded by the employer have
decreased significantly. Employees are now being enrolled in profit-sharing plans, which
provide lower benefit amounts, along with 401(k) or other similar plans [such as 403(b)
plans for nonprofits], which may or may not offer company matches of employee
contributions. Savings accounts are not set up for Social Security contributors.
Roland, age 60, has made deposits totaling $18,000 into a Roth IRA account. The
account is now worth $24,500. He withdraws $10,500 to purchase a car. How much of
this withdrawal is taxable? - correct answer 0
Principal is considered to be withdrawn first from a Roth IRA, meaning Roland could
have withdrawn up to $18,000 without tax consequences.
Funds used for which of the following is an exception from the 10% early withdrawal
penalty that applies to all retirement plans? - correct answer A)
First-time home purchase of up to $10,000
B)
Total and permanent disability of the account owner
C)
Higher education costs
, D)
Business expenses
B-Death and disability are exceptions from the 10% early withdrawal penalty for all
retirement plans. The exceptions for higher education costs and first-time home
purchases of up to $10,000 only apply to IRA accounts. Funds used for business
expenses are not listed as an exception for any retirement plan.
Assume that a worker's Social Security full retirement age is 67, and the worker retires
and starts drawing Social Security early at age 64. What are the consequences? -
correct answer The worker receives a reduced benefit for the rest of his life.
If a worker starts drawing Social Security retirement benefits early (as early as age 62 is
allowed), then he will receive a reduced benefit for life. Like all benefits, this reduced
benefit will be adjusted for inflation each year.
To be eligible for Social Security retirement benefits, an individual must be - correct
answer currently insured and at least age 67.
B)
either currently or fully insured.
C)
currently insured.
D)
fully insured.
D
Which of these statements regarding age 72 minimum distribution requirements is
CORRECT? - correct answer A)
A deductible IRA owner must pay a 50% penalty tax on any required minimum
distributions (RMDs) not taken.
B)
