Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

The first statement is true because it accurately reflects the regulatory framework surrounding loans from retirement plans. While some retirement plans, such as 401(k) plans, often allow loans, others, like traditional IRAs and Roth IRAs, do not permit any loans at all. This distinction is critical for individuals planning their finances since not all retirement savings vehicles offer the same options regarding borrowing. Understanding the specific rules associated with each type of retirement account is essential to effective retirement planning.

The other statements contain inaccuracies regarding the terms and conditions for loans from retirement plans. For instance, the maximum repayment term for loans is generally up to five years, unless the loan is used for purchasing a primary residence, which may extend beyond that. However, it's not limited to ten years as suggested. Furthermore, loans for acquiring a principal residence can indeed exceed five years; they often have repayment periods of up to 15 years if structured according to plan rules. Lastly, loans from retirement plans do not uniformly have to be repaid within one year; the repayment terms can vary based on the nature of the loan and the specific plan provisions. Understanding these elements is critical for prudent financial planning and management of retirement accounts.