Author Topic: CPA professional education question- I failed  (Read 3445 times)

BeanCounter

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CPA professional education question- I failed
« on: September 26, 2019, 10:24:29 AM »
 I recently got the following question wrong on my CPE for my CPA license-
 
 During a seminar on retirement planning, you are presenting to young business professionals, a questioner in the audience asks when you would recommend that he begin planning for retirement. You explain that he would like to begin a retirement plan when he is:

 A) In his 30's or 40's
 B) 10 to 15 years before he plans to retire
 C) In his 50's
 D) When he has income

I said D- when he has income. And it was wrong. I guess that's why I'm FI at 40 and many other CPA's are not?
The correct answer was
Spoiler: show
A-in his 30's or 40's

solon

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Re: CPA professional education question- I failed
« Reply #1 on: September 26, 2019, 10:25:42 AM »
Wow, that's amazing. I can't imagine there is a WRONG time to plan for retirement.

jinga nation

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Re: CPA professional education question- I failed
« Reply #2 on: September 26, 2019, 10:28:47 AM »
Agree. Wife is CPA. She said you have to answer Qs as a mainstream American, not as a frugal/savvy/Mustachian.
It's annoying but the CPE creators say questions have to reflect the mainstream scenarios.

Kris

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Re: CPA professional education question- I failed
« Reply #3 on: September 26, 2019, 10:28:59 AM »
Wow. Just wow.

saguaro

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Re: CPA professional education question- I failed
« Reply #4 on: September 26, 2019, 11:36:01 AM »
Speaking as someone who started the first IRA at 25 and was ticked off a year later when I got my first job that had a 401k plan that I had to wait a year to participate (rules at the time), color me surprised at this one.  Can't imagine that there's ever a wrong time.

BeanCounter

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Re: CPA professional education question- I failed
« Reply #5 on: September 26, 2019, 11:49:32 AM »
Speaking as someone who started the first IRA at 25 and was ticked off a year later when I got my first job that had a 401k plan that I had to wait a year to participate (rules at the time), color me surprised at this one.  Can't imagine that there's ever a wrong time.
Started my Roth IRA my senior year of high school and contributed every year since. Well, until we hit the income limits two years ago. Whoops. Time to RE!!

six-car-habit

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Re: CPA professional education question- I failed
« Reply #6 on: September 26, 2019, 06:21:37 PM »
 maybe they are coming from the assumption that planning for retirement [ health care , home downsize ,socail security #'s, ageing issues , etc ]  is different than saving money for retirement.

 Had a co-worker who was saving $$ in mutual funds, mostly because his parents urged him too. He was saving money towards a far-off goal of retirement and buying himself nice things in the future. But he was in his 20's - there was no "retirement plan". It was saving money for savings and compound interests sake only.  Anyhow he passed away young in an accident so it was all moot.  Just a guess on The CPA exam logic.

GuitarStv

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Re: CPA professional education question- I failed
« Reply #7 on: September 27, 2019, 07:51:15 AM »
lol

v8rx7guy

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Re: CPA professional education question- I failed
« Reply #8 on: September 27, 2019, 09:50:57 AM »
Hmmmm seems very wrong.  But I do wonder precisely how the question was phrased.  It sounds as if you a paraphrasing how you remember the question.  If the "planning" was clearly referring to "saving" for retirement... the correct answer should absolutely not be "30-40 years old"  as that is blatantly incorrect, even from an anti mustachian standpoint.  Now if "planning" was more pointed to "thinking about" or "considering which mechanisms will be used" for retirement, I could consider that to be a reasonable answer.

If it is the former, I would figure out how to challenge that.  But I think you might find yourself finding that you do not remember the question correctly if you ever get the opportunity to see it again.

On another note, did you not have to sign something saying you would not disclose questions from the test?  I know for the PE exam, people have had their licenses revoked for posting questions on forums... be careful.

mm1970

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Re: CPA professional education question- I failed
« Reply #9 on: September 27, 2019, 01:57:19 PM »
I have to thank my college buddy for introducing me to the ex-military retirement planning people.  So yeah, the dude signed me up for a bunch of front loaded mutual funds (and I was too dumb/ stupid to know any better).  But that had me in the habit of saving money for retirement when I was 22 years old, within months of graduating from college.

BeanCounter

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Re: CPA professional education question- I failed
« Reply #10 on: September 27, 2019, 05:10:16 PM »
Hmmmm seems very wrong.  But I do wonder precisely how the question was phrased.  It sounds as if you a paraphrasing how you remember the question.  If the "planning" was clearly referring to "saving" for retirement... the correct answer should absolutely not be "30-40 years old"  as that is blatantly incorrect, even from an anti mustachian standpoint.  Now if "planning" was more pointed to "thinking about" or "considering which mechanisms will be used" for retirement, I could consider that to be a reasonable answer.

If it is the former, I would figure out how to challenge that.  But I think you might find yourself finding that you do not remember the question correctly if you ever get the opportunity to see it again.

On another note, did you not have to sign something saying you would not disclose questions from the test?  I know for the PE exam, people have had their licenses revoked for posting questions on forums... be careful.
This is verbatim what was in the test question. And this is for continuing professional education which is a self study, not the actual CPA exam which doesnít even cover retirement other than the tax code for various accounts. So no rules broken. For $200 you too can have access to these fantastic professional education classes to maintain your license.

BeanCounter

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Re: CPA professional education question- I failed
« Reply #11 on: September 27, 2019, 05:12:21 PM »
I have to thank my college buddy for introducing me to the ex-military retirement planning people.  So yeah, the dude signed me up for a bunch of front loaded mutual funds (and I was too dumb/ stupid to know any better).  But that had me in the habit of saving money for retirement when I was 22 years old, within months of graduating from college.
Well thatís better than the college boyfriend that sold me whole life insurance! (Which I didnít have long- the boyfriend or the insurance!)

Indexer

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Re: CPA professional education question- I failed
« Reply #12 on: October 01, 2019, 05:49:18 PM »
I feel this is wrong on a few levels.

Obviously it's bad financial planning advise. Thanks to compounding, even a small contribution in your 20s can be more impactful than a large contribution in your 50s. This is true even for people who want to retire at traditional ages so I think D should be the right answer even for the general public.

In addition, isn't tax planning about saving money on taxes? Aren't 401(k)/IRA contributions some of the most basic ways to save money on taxes?

wbranch

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Re: CPA professional education question- I failed
« Reply #13 on: October 02, 2019, 09:53:05 AM »
Not surprising. But I go to some live tax CPE courses and usually when retirement plans come up the instructors talk about encouraging young clients and even young staff accountants to start throwing money into retirement accounts ASAP. It does get tiring talking to clients making $150k+ in a MCOL area not wanting to put away more to retirement and complaining about not having money.

norajean

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Re: CPA professional education question- I failed
« Reply #14 on: October 02, 2019, 11:41:39 AM »
If my CPA had told me to start planning for retirement in my 20s I would have fired her!

NorCal

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Re: CPA professional education question- I failed
« Reply #15 on: October 02, 2019, 11:58:36 AM »
I have to thank my college buddy for introducing me to the ex-military retirement planning people.  So yeah, the dude signed me up for a bunch of front loaded mutual funds (and I was too dumb/ stupid to know any better).  But that had me in the habit of saving money for retirement when I was 22 years old, within months of graduating from college.

FirstCommand bank?  My story is remarkably similar because of those scumbags.  I hope they get sued out of existence.

College Stash

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Re: CPA professional education question- I failed
« Reply #16 on: October 04, 2019, 09:11:11 PM »
As a young CPA I find this depressing.

GuitarStv

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Re: CPA professional education question- I failed
« Reply #17 on: October 05, 2019, 09:23:47 AM »
If my CPA had told me to start planning for retirement in my 20s I would have fired her!

Me too.  She would be starting four years late.

Cpa Cat

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Re: CPA professional education question- I failed
« Reply #18 on: October 05, 2019, 11:46:11 AM »
I recently got the following question wrong on my CPE for my CPA license-
 
 During a seminar on retirement planning, you are presenting to young business professionals, a questioner in the audience asks when you would recommend that he begin planning for retirement. You explain that he would like to begin a retirement plan when he is:

 A) In his 30's or 40's
 B) 10 to 15 years before he plans to retire
 C) In his 50's
 D) When he has income


If the dude is asking the question, then the answer is "right now."

Anyone with a CPA license can write CPE for royalty income. As such, the quality varies widely.

Goldielocks

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Re: CPA professional education question- I failed
« Reply #19 on: October 15, 2019, 10:43:51 AM »
Just saw this and had to reply to an older post..
 I had a similar question on my CFP exam last June. 

It was a long answer question about a retirement planning scenario for a person planning to retire in 20 years.  They were moderately conservative investing style but could definitely handle ETF's / Equities.  Although they had a paid off home, and a pension that would cover all of their living costs after retirement, suggesting that they look to allocating 75% or more in equities for the remainder of their long term savings was apparently the wrong answer...  "Too aggressive".   huh?  Too aggressive to put 30% of your net assets into equities?

Obviously the author of the question thought that one should ignore pensions and home value as part of one's portfolio when answering.

The sucky part is that was a multi-part case study, and an early question, that when wrong removed your ability to get full score on the rest of it.

Hunny156

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Re: CPA professional education question- I failed
« Reply #20 on: October 16, 2019, 10:24:07 AM »
Umm, this guy might know a thing or two about investing, and he absolutely disagrees w/the "correct" answer to that question!

https://www.foxbusiness.com/business-leaders/charles-schwab-advice-new-investors