Retirement Plans and Social Security
All of the following apply to defined benefit plans EXCEPT
Contributions are tied to the company profits.
Which of the following are Social Security benefits?
Retirement, disability and survivors
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
Being age 65.
All of the following benefits are available under Social Security EXCEPT
Welfare benefits.
Under the 401(k) bonus or thrift plan, the employer will contribute
An undetermined percentage for each dollar contributed by the employee.
Which of the following scenarios will incur a 10% tax penalty on distributions?
Distributions are made on a policy before age 59½.
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee.
Traditional IRA contributions are
Tax deductible.
The advantage of qualified plans to employers is
Tax-deductible contributions.
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
They are tax deferred until withdrawn.
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval.
Social Security was created to provide all of the following benefits EXCEPT
Unemployment income.
When do full Social Security retirement benefits begin?
When the worker reaches age 65 and has earned the required amount of work credits.
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) Plan (TSA).
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
For a retirement plan to be qualified, it must be designed for the benefit of
Employees.
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
How is Social Security funded?
Taxes imposed on a worker's earned income
Who may contribute to a Keogh (HR-10) plan?
Self-employed plumber
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension plan.
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible.
If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is
Fully insured.
A claimant, who is totally and permanently disabled, is eligible for Social Security Disability benefits after an elimination period of
5 months.
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?
Distributions are taxable.
Which of the following characteristics applies to defined benefit plans but not defined contribution plans?
The amount of contributions made by the employer is determined by an actuarial formula.
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
The amount of the distribution is reduced by the amount of a 20% withholding tax.
In a defined contribution plan,
The contribution is known and the benefit is unknown.
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit sharing plan
What is the number of credits required for fully insured status for Social Security disability benefits?
40
What is the penalty for IRA distributions that are below the required minimum for the year?
50%
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only.
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year that contains the fifth anniversary of the owner's death.
In a direct rollover, how is the money transferred from one plan to the new one?
From trustee to trustee
All of the following are considered Social Security benefits EXCEPT
Group.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
If a retirement plan or annuity is "qualified," this means
It is approved by the IRS.
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?
Blackout Period
Which of the following is true about a defined benefit plan?
High-salaried employees with only a few years until retirement receive the highest contribution.
If an annuitant dies during the accumulation period, what benefit (if any) will be included in the annuitant's estate?
Accumulated cash value
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs are suitable for large companies.
Employer contributions made to a qualified plan
Are subject to vesting requirements.
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 percent of the employee's annual wages?
3
If a company has a Simplified Employee Pension plan, what type of plan is it?
A qualified plan for a small business
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.
What is the official name for the Social Security program?
Old Age Survivors Disability Insurance