CFP Practice Test 1

Vernon Quist (73, born 1953) and Marjorie Quist (70, born 1956) retired in 2025, Vernon from a corporate finance role and Marjorie from a consulting practice. They file jointly, live in a common-law state and are in good health. Their adult children, Nathaniel (a surgeon) and Odette (an attorney), are financially secure and in the top income tax brackets.

Goals: (1) maintain their lifestyle without running out of money; (2) give $20,000 a year to their university and their congregation; (3) leave as much as possible to their children after tax; (4) keep their estate plan current. They describe their risk tolerance as moderate and say a large market drop early in retirement is their biggest fear.

Their 2024 MAGI, their last full working year, was $410,000. SSA has notified them that income-related surcharges (IRMAA) apply to their 2026 Medicare Part B and Part D premiums.

Investment policy statement (2025): target 50% equities, 45% bonds, 5% cash; rebalance when any asset class moves more than 5 percentage points from target.

Both IRAs name the other spouse as primary beneficiary and the two children equally as contingent beneficiaries. Vernon turns 73 in 2026, his first RMD year; Marjorie's RMDs will begin at 73. Neither has a Roth IRA. Vernon collects $3,500 a month and Marjorie $1,667 a month from Social Security. Both are enrolled in Medicare Parts B and D with Medigap coverage.

Wills (2012): at the first death, "the maximum amount that can pass free of federal estate tax" funds a credit shelter (bypass) trust for the survivor, paying all income and principal only for health, education, maintenance and support; the balance passes outright to the survivor. At the second death everything passes equally to Nathaniel and Odette. Durable powers of attorney and health care directives were signed in 2012. The residence is joint with right of survivorship; the taxable portfolio is in Vernon's name.