LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client's spouse is fifteen years younger. In the profile this matters because it affects:
- The minimum withdrawal election on a future income fund and the household's effective horizon
- BThe client's own risk tolerance, which rises when a spouse has a longer life expectancy
- CThe contribution room available, which is calculated on the older spouse's earned income only
- DWhether the couple may hold a joint registered plan, which requires spouses of similar ages
Correct answer: A) The minimum withdrawal election on a future income fund and the household's effective horizon
A younger spouse's age can be elected for minimum withdrawals, and the money has to last through the survivor's lifetime, which lengthens the planning horizon considerably.
Why the other options are wrong
- BTolerance is a personal characteristic, not a function of a spouse's age.
- CRoom is calculated on the plan holder's own earned income.
- DRegistered plans are individual; there is no joint registered plan.
Exam tip
A younger spouse lengthens the horizon and lowers the minimum.
Common mistake
Planning a retiree's income around one spouse's life expectancy.
What this tests
CISRO competency component 1.1 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
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