Advanced Diploma of Financial Planning (ADFP) Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Advanced Diploma of Financial Planning Exam. Study with flashcards and multiple-choice questions, each question has hints and explanations. Get ready for your exam!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

When must annual distributions from qualified retirement plans typically begin?

  1. The year participants turn 65

  2. The year participants turn 70.5

  3. The year participants turn 72

  4. Only upon retirement

The correct answer is: The year participants turn 72

Annual distributions from qualified retirement plans must typically begin in the year participants turn 72, which aligns with changes made to the required minimum distribution (RMD) rules under the SECURE Act. The law adjusted the age for commencing RMDs from 70.5 to 72, acknowledging longer life expectancies and allowing individuals to keep their funds invested for a longer period before mandatory withdrawals begin. In contrast, the other options refer to ages that are outdated or conditions that do not apply universally to all retirement plans. For example, while 70.5 was the previous age for RMDs, it has been superseded by the current requirement of age 72. Additionally, stating that distributions must begin only upon retirement is inaccurate, as RMDs are based on reaching a specific age rather than retirement status itself.

More Questions Like This