19.4

Which of the following is a defined-contribution plan intended for firms with 100 or fewer employees? A) 401(k) plan B) SEP plan C) SIMPLE plan D) 403(b) plan

c

Educational institutions and charitable organizations offer a defined-contribution plan called a(n) ________ plan.

403b

Under a SEP, an employee A) is not allowed to make contributions. B) can contribute up to $6,000 per year. C) is not taxed until his or her contributions are withdrawn. D) can defer taxes with contributions.

a

Under federal guidelines, the 2012 maximum contribution to a 401(k) is A) $17,000. B) 80% of gross income. C) $400 per month. D) there is no limit.

a

Which of the following employers might offer you a SEP? A) Al's Gas Station B) Ford Motor Company C) U.S. Army D) General Electric

a

When you leave an employer, your options with your 401(k) are all of the following except A) leave it with your former employer. B) transfer it to your new employer. C) transfer it to a rollover IRA. D) withdraw it with no tax penalty if done in 90 days.

d

Which of the following is true about a 401(k) plan? A) There is no penalty for early withdrawal of these funds B) There is no limit on the dollar amount you can contribute C) Your contributions are automatically vested and are yours, regardless of when you leave the firm D) 401(k) contributions are made after taxes are paid on your salary

d

A ________ is established to transfer assets tax-free from a company retirement plan. A) SEP B) traditional IRA C) rollover IRA D) Keogh

c

Your worst choice as an investment option for your 401(k) would be A) the stock of the company for which you work. B) mutual funds investing in high growth stocks. C) mutual funds investing in blue chip stocks. D) mutual funds investing in bonds.

a

Which of the following employers would be most likely to offer a 403(b) plan? A) General Motors B) Wright State University C) Duke Power D) SBC Corporation

b

Which of the following is false about a 401(k) plan? A) Withdrawals before age 59-1/2 result in a 10% tax penalty B) Less than 50% of all employers offering these plans match a portion of employee's contributions C) Your contributions are limited to a set dollar amount each year D) The money you contribute is deducted from your paycheck before taxes are assessed

b