Qualified Plans
If a retirement plan is qualified, what does that mean?
The plan has favorable tax treatment
What qualified plan is suitable for the self employed?
HR-10 or Keogh
What is required to qualify an individual to contribute to a traditional IRA?
Earned income
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees
In what form of payment must the contributions to a traditional IRA be made?
In cash
In qualified plans, are employer contributions taxed as income to the employees?
No
What is the primary purpose of a 401(k) plan?
Provide retirement income
Who qualifies for tax sheltered annuities, or 403(b) plans?
Employees of nonprofit organizations under Section 501(c)(3) and employees of public school systems
SIMPLE plans are available to groups of how many employees?
100 or less
What is the penalty for excessive contributions to a traditional IRA?
6%
An employer is sponsoring a qualified retirement plan for its employees where the employer contributes money whenever the business has profit. What is this type of plan called?
Profit sharing plan
What are the consequences of withdrawing funds from a traditional IRA prior to the age of 59 1/2
10% penalty
What are the income tax benefits of a qualified plan?
Employer contributions are tax deductible and are not taxed as income to the employee. The earning accumulate tax deferred
What are some examples of qualified plans?
IRA, 401(k), HR10 (Keogh), SEP, SIMPLE
What type of plan is 401(k)?
Qualified profit-sharing plan