Certified Financial Consultant (CFC) Practice Exam

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

Prepare for the Certified Financial Consultant Exam. Enhance your understanding with detailed questions, hints, and explanations. Boost your confidence for the CFC test!

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.

What is a primary advantage of qualified plans for employers?

Tax exempt contributions
Tax deductible contributions
No reporting requirements
No contributions required

The correct answer is: Tax deductible contributions

A primary advantage of qualified plans for employers is that contributions made to these plans are tax-deductible. This means that when an employer contributes to a qualified retirement plan on behalf of their employees, they can deduct those contributions from their taxable income. This can lead to significant tax savings for the employer, making it an attractive option for businesses looking to provide retirement benefits while managing their tax liability. In addition, this tax-deductibility can encourage more companies to offer qualified retirement plans, as it helps align the interests of employers in providing valuable benefits to employees while incentivizing them to participate in a plan that can ultimately aid in employee retention and satisfaction. Employers also enjoy other favorable features of qualified plans, such as potential tax credits and a structured format for reaching employee retirement goals. However, not all options presented align with the main benefit of tax-deductibility, which is why it stands out as the primary advantage.