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Main Page Gauge Your Knowledge Investment Questions

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Gauge Your Investment and Financial Knowledge

Yes No Retirement
1
Do you thoroughly understand the pros and cons of types of retirement accounts: taxable, tax-deferred, tax-free and annuities?
2
Have you analyzed which type of retirement account will give you the highest, long-term, after-tax performance?
3
Do you know that the sequence you fund the types of retirement accounts can have a major affect on your retirement?
4
Do you know that the sequence you withdraw funds from retirement accounts can have a major affect on your retirement?
5
Have you thought about how to balance investment risks against other risks such as inflation, poor health, etc?
6
In planning for retirement, have you analyzed actuarial data on your chances of living to a very old age?
7
Have you analyzed how many years your savings and investments will last in your retirement?
8
Do you have a more thorough estimate of your Social Security benefits than the estimate you may have received in the mail?
9
Are you aware that certain types of pensions will reduce your Social Security retirement benefits?
10
Have you analyzed Social Security benefit implications of early, normal, or late retirement--and how this affects your retirement plan?
11
Do you know when it is advantageous to convert a Traditional IRA into a Roth IRA?
12
Do you know the advantages of rolling over a 401(k) plan (or other qualified employer plan) into a Traditional IRA?
13
If both spouses have retirement accounts, do you know how to determine which spouse's accounts to draw down first?
14
Are you aware that if you are over 50, you can contribute extra amounts to most retirement accounts?
15
Do you understand that so-called expected case investment projections are extremely unlikely to occur as projected?
16
Do you know how to model the uncertainty of investment returns to analyze the sufficiency of your investment resources?
17
Do you understand the importance of making retirement projections in both inflated and constant dollars?
18
Do you understand the restrictions and limitations of most annuities?
19
Do you understand the disadvantages of having an annuity inside of a tax-deferred retirement account?
20
Do you understand the investment disadvantages of whole/universal/variable life insurance?
21
Have you included the affects of income taxes on your retirement planning?
Higher Education
22
Parents: Do you understand the powerful advantages of 529 accounts for saving for higher education expenses?
23
Parents: Do you know how to distribute assets between yourself and your children to optimize financial aid eligibility?
24
Parents: Are you aware of the three significant income tax breaks related to higher education expenses?
25
Grandparents: Are you aware of the powerful advantages of 529 accounts for providing money for your grandchildren's education?
Elementary and Secondary Schooling
26
Parents: Do you understand the advantages of Coverdell IRAs for saving for tuition for private elementary and secondary schools?
27
Grandparents: same as question 26.
Fundamental Investment Concepts and Products
28
Are you aware of what efficient portfolios are--and how to use this concept to maximize expected return for a level of expected risk?
29
Do you understand the definition of asset classes, how to find historical return/risk characteristics about them, and their usefulness?
30
Do you understand the advantages of owning exchange traded funds (ETFs)?
31
Do you understand how to use REITs to invest in commercial real estate without the obligations of direct property ownership?
32
Are you aware of investment expenses you are incurring that do not increase returns or reduce risks?
33
Do you understand the concept of regression to the mean and how it can be used to guide periodic portfolio re-balancing?
34
Are actively managed mutual funds a good investment compared to other ways of achieving diversification?
35
Do you own mutual funds with sales commissions or high expense ratios?
36
Do you know that mutual funds must distribute net capital gains, but cannot distribute net capital losses?
37
Do you understand how investment risk is measured?
38
Do you understand that you shouldn't expect higher returns for risk that you can diversify away?
39
Do you understand the relationship between the movement of interest rates and the prices of fixed income securities?
40
Do you understand that a portfolio should have a lower level of risk than the average risk of the securities in the portfolio?
41
Do you understand that options can be used to manage risk?
42
Do you understand that options can be used to generate incremental income?
43
Do you know how to determine if municipal bonds belong in your portfolio?
44
Do you understand the role of international investing in an investment plan?
45
Do you understand the role of home ownership in your investment and retirement plan?
46
Do you appreciate the value of having a modular structure to your portfolio?
47
Are you aware that there are often high transaction costs associated with buying and selling individual bonds?
Other Taxation Issues
48
Do you take advantage of any net taxable losses to shield ordinary income from taxation?
49
Do you understand the tax code as it pertains to investment income and expenses?
50
Are you aware that there are four different tax rates for long-term capital gains depending on the holding period and your tax bracket?
Charitable Giving
51
Do you understand the advantages of donor advised charitable funds to maximize the tax advantages of charitable giving?
Incapacitation, Death, Probate and Estate Taxes
52
Do you know how to protect your investment assets and avoid legal fees if you become incapacitated?
53
Do you know what probate is and how long it typically lasts?
54
Do you know what standing probate is and how to avoid it?
55
If your estate is subject to probate, do you know what % of your estate may be consumed by probate expenses?
56
Do you know that in Ohio, if your estate exceeds $35,000, your estate will likely be subject to probate?
57
Do you know that estate assets distributed through a will normally go through probate?
58
Do you know how to spare your heirs from the needless expense and heartache associated with probate?
59
Do you know how to structure your assets to minimize federal and state estate taxes?
60
Do you understand what a stepped-up cost basis is and how this benefits your heirs?
61
Do you understand the disadvantages of naming your estate or a trust as the beneficiary of an IRA?
62
Do you understand the advantages of revocable trusts (also called living trusts)?
Performance Measurement
63
If you do not know the rate of return of your investments, can you assess how well you are doing versus a market benchmark?
64
Can you calculate the rate of return of your investments--allowing for contributions, withdrawals, and the time value of money?
65
Can you break down your investment returns between dividends, interest, realized gains, and unrealized gains?
66
Can you track your total investment returns by asset class?
67
Can you track your total investment returns by individual security?
68
Can you calculate your total investment returns for various time periods?
69
Have you identified relevant benchmarks to compare your investment performance against?
Investment Plans
70
Would a personalized, comprehensive, long-term, investment plan (to meet your objectives) be useful to you?
71
Should the plan integrate data about your circumstances and objectives with a wide range of investment concepts?
72
Should the plan include the effects of taxes?
73
Should the plan include an analysis of the uncertainly of investment returns?
74
Should the plan recommend how to achieve the highest expected return for a given level of expected risk?
75
Should the plan be written and well documented?
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