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99 multiple-choice questions and 53 flashcards on Retirement Plans and Suitability, about 16% of the Series 7 FINRA bank. Every one carries a written rationale.
Retirement Plans and Suitability is one of 9 chapters in CoStudy's Series 7 (FINRA) bank, and it holds 99 of the bank's 630 multiple-choice questions — roughly 16% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
10 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
A 457(b) governmental plan distribution to a separated participant under age 59.5 is:
Answer: B — Generally not subject to the 10% early-withdrawal penalty
A) Reverses the treatment. B) Correct — governmental 457(b) distributions after separation escape the 10% penalty. C) Not automatic; must be elected. D) No doubled penalty exists.
A traditional IRA's contribution deductibility phases out based on income if the taxpayer is:
Answer: B — Covered by workplace plan
A) Age is not the trigger. B) Correct — workplace-plan coverage triggers it. C) Self-employed alone is not it. D) State tax rules are unrelated.
A SEP-IRA is generally funded by:
Answer: B — Employer contributions only
A) Employees do not defer under SEP. B) Correct — employer contributions. C) No government match applies. D) SEP is pretax, not Roth.
When a customer dies, the account should immediately be:
Answer: C — Frozen pending legal papers
A) Liquidating without authority is improper. B) Transfer only after documentation. C) Correct — freeze until documents are received. D) Margin conversion is unauthorized.
Required Minimum Distributions from a traditional IRA generally begin at age:
Answer: D — Age seventy-three (SECURE 2.0)
A) 59½ ends the early penalty. B) 70½ was the prior rule. C) 65 is not the RMD age. D) Correct — RMDs at 73 under SECURE 2.0.
A rep must record a trusted contact person primarily to help detect suspected:
Answer: D — Senior financial exploitation
A) Best-ex is a separate rule. B) Insider trading is separate. C) Wash sales are a tax rule. D) Correct — protects vulnerable senior clients.
Contributions to a 529 plan are:
Answer: D — Not federally deductible
A) No federal deduction is allowed. B) Deposits are not taxed as income. C) Itemizing does not create a deduction. D) Correct — tax-free growth, no deduction.
A series of recommended trades, each individually suitable, that together generate costs disproportionate to the customer's objectives raises a concern under:
Answer: C — Quantitative suitability
C) Correct — quantitative suitability addresses whether a series of transactions, taken together, is excessive. A) Reasonable-basis concerns product-level understanding, not trade frequency. B) Customer-specific concerns whether one recommendation fits the client, not a pattern across many trades. D) Regulation SHO governs short-sale practices, unrelated to trading frequency suitability.
A Roth IRA distribution of EARNINGS is tax-free only if the:
Answer: A — Holder is over 59.5 and account is 5+ years old
A) Correct — qualified Roth earnings require BOTH the age 59.5 trigger AND the five-year holding rule. B) Age alone is insufficient. C) The five-year rule alone is insufficient. D) Disability waives age but the 5-year rule still applies.
A rep must record a trusted contact person primarily to help detect suspected:
Answer: D — Senior financial exploitation
A) Best-ex is a separate rule. B) Insider trading is separate. C) Wash sales are a tax rule. D) Correct — protects vulnerable senior clients.
4 cards from the 53 in this chapter.
What is a money purchase pension plan?
A defined contribution plan where the employer contributes a fixed percentage of each employee's compensation. Mandatory annual contribution.
What is a qualified distribution from a Roth IRA?
Withdrawals that are both (1) at least 5 years after the first contribution and (2) after age 59½, death, disability, or first-time home purchase ($10K). Tax-free.
Do Roth IRAs have Required Minimum Distributions (RMDs)?
No — Roth IRAs have no RMDs during the owner's lifetime. Roth 401(k)s previously had RMDs but SECURE 2.0 Act eliminated them starting 2024.
What is a Keogh plan?
A qualified retirement plan for self-employed individuals and unincorporated businesses. Can be defined benefit or defined contribution.
These are a sample. The full Retirement Plans and Suitability chapter runs 152 items with per-chapter progress tracking, on the web and in the iOS app.
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