Ch 3 Retirement

Maggie incurred a10% penalty to distributions from her qualified plan because they were made before she turned:

59 1/2

What are the two terms used to describe whether or not special federal tax benefits apply to retirement plans?

Qualified; nonqualified

All of the following are characteristics of qualified retirement plans, EXCEPT:

There are two types of qualified plans.

Mildred is age 58. She withdraws a sum of money from her qualified plan. What is the penalty?

10% penalty tax

What happens if Becky takes her distributions from her qualified plan prior to age 59 1/2?

A 10% penalty tax is assessed.

Which of the following is not a characteristic of qualified plans?

Employee contributions are not tax-deductible.

A nonqualified plan:

Permits discrimination in favor of certain employees.

All of the following are characteristics of qualified retirement plans, EXCEPT:

Contributions are not tax-deductible for the employee.

If Becky wants to take a distribution from her qualified retirement plan, she should know that distributions can be made:

At any time.