Advanced Diploma of Financial Planning (ADFP) Practice Test

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Prepare for the Advanced Diploma of Financial Planning Test. Study with flashcards and multiple choice questions, receive explanations for each answer. Get exam-ready now!

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What was the original intention behind Social Security benefits?

To provide total financial support during retirement
To serve as a supplemental income source
To cover medical expenses for the elderly
To ensure life insurance coverage for all workers

The correct answer is: To provide total financial support during retirement

The original intention behind Social Security benefits was to serve as a supplemental income source. Established in response to the economic turmoil during the Great Depression, Social Security was designed to provide a safety net for workers and their families, primarily aimed at reducing poverty among the elderly. The program's framework was such that it would ensure retirees, along with their dependents, received some level of financial assistance, but it was never intended to be the sole source of income. The concept was to enhance financial security rather than replace all other forms of income. By doing so, it allowed retirees to supplement their savings, private pensions, and other income sources while providing basic support during their retirement years. This foundational idea reflects the understanding that individuals would need multiple streams of income in retirement to maintain their standard of living, which continues to be a principle of personal financial planning today.