A RETIREMENT PLANNING MINI-CASE / TUTORIALOUTLET DOT COM A RETIREMENT PLANNING MINI-CASE / TUTORIALOUTLET D | Page 9

COBRA and HIPAA benefits until age 65, at which time they will be
eligible to enroll in Medicare.
c. The cost of Medicare will increase dramatically for each year that
they postpone enrolling after age 60.
d. None of the above.
12. Which of the following strategies should the Mayfields consider
to increase their level of discretionary cash
flow?
a. Pay off credit card debt with monetary assets.
b. Open a home equity line of credit.
c. Increase contributions to Peter’s 403(b).
d. Increase IRS W-4 withholdings on an annual basis.
e. A and b only.
13. If Peter and Ann want to pay off their credit card debt, which of
the following assets should they use first?
a. Money market fund
b. Proceeds from a 403(b) loan
c. I-bonds
d. Home equity
14. Suppose that the Mayfields decide to retire at age 60. How much
do they need in assets at that time to fund
income needs from ages 60–62, assuming that they still want $90,000
(in today’s dollars) in annual income starting
on their first day of retirement?
a. $114,009
b. $225,847
c. $228,018
d. $231,438
15. Peter and Ann are concerned about estate planning details. They
have heard about income in respect of a
decedent (IRD). They realize that their retirement plans could be
subject to IRD taxation. Which of the following
statements is true in relation to IRD property?
I. IRD property will be included in the Mayfields’ estates at fair
market value.
II. IRD property does not receive a step-up in basis.
III. IRD property is subject to income taxation when the heir or estate