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100+ Free HS 326 Practice Questions

HS 326 Planning for Retirement Needs (ChFC) practice questions are available now; exam metadata is being verified.

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A key distinction between a governmental 457(b) plan and a nongovernmental (tax-exempt) 457(b) plan is that assets in a governmental 457(b) plan are:

A
B
C
D
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2026 Statistics

Key Facts: HS 326 Exam

$24,500

2026 401(k) Deferral Limit

IRS Notice 2025-67

$72,000

2026 415(c) DC Limit

IRS Notice 2025-67

$290,000

2026 Max Defined Benefit

IRS Notice 2025-67

Age 73

RMD Beginning Age

IRS / SECURE 2.0

$184,500

2026 Social Security Wage Base

Social Security Administration

100

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HS 326 Planning for Retirement Needs is a multiple-choice, online proctored course final exam from The American College, required in both the ChFC and CFP education programs. It tests qualified plans, IRAs, SEP and SIMPLE plans, 403(b) and 457 plans, nonqualified deferred compensation, distribution and required minimum distribution rules, and Social Security. Key 2026 figures include a $24,500 elective deferral limit, $72,000 415(c) annual additions, $290,000 maximum defined benefit, $7,500 IRA limit, RMD age 73, and a $184,500 Social Security wage base. The American College does not publish a fixed question count, pass rate, or raw passing percentage.

Sample HS 326 Practice Questions

Try these sample questions to test your HS 326 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In a retirement income needs analysis, a planner reduces the client's pre-retirement gross income to estimate retirement spending. What is the primary rationale for using a wage replacement ratio below 100%?
A.Inflation is expected to be zero during retirement
B.Certain expenses such as payroll taxes, retirement-plan savings, and work-related costs typically cease or decline in retirement
C.Social Security replaces 100% of pre-retirement income for most workers
D.Required minimum distributions automatically cover all retirement spending
Explanation: A replacement ratio (commonly 70-80%) reflects that some pre-retirement expenses disappear or shrink after retirement, including FICA payroll taxes on earned income, ongoing retirement-plan contributions, and commuting or work-clothing costs. The client no longer needs to save for retirement once retired.
2A defined benefit plan promises a fixed monthly benefit at retirement. Which party bears the primary investment risk in a traditional defined benefit pension plan?
A.The plan participant
B.The plan participant's beneficiary
C.The IRS
D.The employer (plan sponsor)
Explanation: In a defined benefit plan the employer guarantees a specified benefit formula, so the employer must fund the promised benefit regardless of investment performance. If plan assets underperform, the employer must contribute more; the participant's benefit is fixed by the formula.
3For 2026, what is the elective deferral limit under IRC Section 402(g) for employee salary deferrals into a 401(k) plan (excluding catch-up contributions)?
A.$23,000
B.$23,500
C.$72,000
D.$24,500
Explanation: The 2026 elective deferral (402(g)) limit for 401(k), 403(b), and most 457(b) plans is $24,500, up from $23,500 in 2025. This applies to pre-tax and Roth elective deferrals combined, before any age-based catch-up contributions.
4A 55-year-old participant wants to maximize 2026 elective deferrals to her employer's 401(k) plan. Including the standard age-50 catch-up, what is her maximum elective deferral for 2026?
A.$24,500
B.$32,500
C.$30,000
D.$35,750
Explanation: The 2026 elective deferral limit is $24,500 and the age-50 catch-up is $8,000, totaling $32,500. The enhanced $11,250 catch-up applies only to participants who attain ages 60 through 63 during the year, which does not apply to a 55-year-old.
5Under SECURE 2.0, beginning in 2026, which participants must make their age-50 catch-up contributions on a Roth (after-tax) basis?
A.Participants whose prior-year FICA wages from that employer exceeded $145,000 (indexed; $150,000 for 2025 wages)
B.All participants regardless of income
C.Only participants under age 60
D.Only participants in governmental 457(b) plans
Explanation: SECURE 2.0 requires that catch-up contributions be made on a Roth basis for participants whose prior-year FICA wages from the employer exceeded an indexed threshold ($150,000 for 2025 wages affecting 2026 catch-ups). Lower earners may still choose pre-tax catch-ups.
6What is the 2026 overall limit on annual additions to a participant's account in a defined contribution plan under IRC Section 415(c)?
A.$69,000
B.$70,000
C.$72,000
D.$290,000
Explanation: For 2026 the 415(c) annual additions limit (employer contributions plus employee deferrals plus forfeitures) is the lesser of $72,000 or 100% of compensation. This was $70,000 in 2025. Age-based catch-up contributions are on top of this limit.
7For 2026, what is the maximum annual benefit payable from a defined benefit plan under IRC Section 415(b)?
A.$290,000
B.$245,000
C.$280,000
D.$72,000
Explanation: The 2026 maximum annual benefit under a defined benefit plan (415(b)) is the lesser of $290,000 or 100% of the participant's average compensation for the highest three consecutive years. This increased from $280,000 in 2025.
8A closely held business with stable, predictable cash flow and an older owner who wants to maximize tax-deductible contributions for himself would most likely benefit from which type of plan?
A.A SIMPLE IRA
B.A SEP limited to 10% of compensation
C.A traditional defined benefit (or cash balance) plan
D.A Roth IRA only
Explanation: Defined benefit and cash balance plans allow the largest deductible contributions for older owners because contributions are actuarially determined to fund a substantial benefit over a short time horizon. Stable cash flow supports the required annual funding obligation.
9Which vesting schedule is the maximum permitted graded vesting schedule for employer matching and other contributions under current law for most qualified defined contribution plans?
A.3-year cliff vesting
B.5-to-15-year graded vesting
C.2-to-6-year graded vesting
D.10-year cliff vesting
Explanation: For employer contributions, the maximum graded schedule is 2-to-6-year graded (20% after 2 years, increasing 20% per year to 100% after 6 years). The alternative is 3-year cliff vesting. These accelerated schedules replaced the older 5-to-15-year rules.
10For 2026, an employee is generally considered a highly compensated employee (HCE) for nondiscrimination testing if their prior-year compensation exceeded what threshold (absent the top-paid group election)?
A.$135,000
B.$155,000
C.$235,000
D.$160,000
Explanation: The HCE compensation threshold under IRC 414(q) is $160,000 for 2026 (based on prior-year pay), unchanged from 2025. An employee is also an HCE if they are a more-than-5% owner regardless of compensation.

About the HS 326 Practice Questions

Verified exam format metadata for HS 326 Planning for Retirement Needs (ChFC) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.