Financing Retirement Is a Challenge for Many Americans

question 34

Multiple Choice

Financing retirement is a challenge for many Americans. Which of the following is not a reason that retirement planning has become more challenging?

• A) Many employers no longer fund retirement programs for their employees.
• B) Many employees have complicated but generous health insurance plans provided by their employer.
• C) Social Security has increased the normal retirement age and lowered benefit targets.
• D) Increases in longevity put a greater burden on retirement savings.

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Definitions:

Permanent Differences

These are variations between taxable income and accounting income that originate from certain items being recognized in one manner for tax purposes and another for financial reporting purposes and do not reverse over time.

Pretax Financial Accounting

The process of preparing financial statements that calculate revenues, expenses, and earnings before taxes are deducted.

Taxable Income

The portion of income that is subject to income tax after adjustments, deductions, and exemptions are applied.

Comprehensive Allocation

The process of distributing costs across multiple departments, projects, or activities in a thorough and extensive manner.