Chapter 3 Insurance

in a defined contribution plan

The contribution is known and the benefit is unknown.

an employee quits her job where she has a balance of $10,000 in her qualified plan. if she decides to do a direct transfer from her plan to a Traditional IRA, how much will she be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

$10,000 no tax consequence

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what % of the employee's annual wages?

3%

all of the following are considered SS benefits EXCEPT

Group

all of the following are requirements of eligibility for SSD income benefits EXCEPT

being age 65

All of the following statements are true regarding tax-qualified annuities except:

employer contributions are not tax deductible

What is the tax consequence of amounts received from a traditional IRA after the money was left in the tax-deferred account by the beneficiary?

income tax on distributions and no penalty

a 35 y/o spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. what penalties, if any, will she have to pay?

no penalties

The advantage of qualified plans to employers is

tax-deductible contributions

What is NOT a difference between qualified and nonqualified plan

taxation on accumulation

All of the following are benefits available under SS EXCEPT:

welfare benefits

what is the penalty for IRA distributions that are below the required minimum for the year

50%

Employer contributions made to a qualified plan

are subject to vesting requirements

SIMPLE Plans require all of the following except

at least 1,000 employees

which of the following applicants would NOT qualify for a Keogh Plan?

someone who works 400 hours per year