Chapter 15
A plan available through companies that operate for a profit; taxes are deferred until the money contribute is withdrawn
401K
A plan for employees of government or not-for-profit organizations; taxes are deferred until the money contributed is withdrawn
403B
What is an individual plan or contract written by an insurance company to provide regular income at a later stage in life?
Annuity
Used to make small changes to an existing will
Codicil
Allows the tax-free buildup of interest or dividends during the contract time
Deferred annuity
The contract specifies the benefits promised to the employee at normal retirement age
Defined-benefit plan
A minimum contribution is made by both employer and employee; no particular benefit is promised
Defined-contribution plan
When a person is living, all he or she owns, less debts owed
Estate
The process of planning for the administration and transfer of property during one's lifetime and at one's death
Estate planning
Levied by the federal government on the transfer of property at death
Estate tax
A Roth IRA offers full tax-free benefits; no tax is levied on money used for a Roth IRA
False
Gift taxes are levied against the person receiving the gift, not against the estate
False
Inheritance taxes are levied against the estate of the decedent by the federal government
False
Insurance needs do not change with retirement
False
Social security benefits are usually sufficient to provide a comfortable retirement
False
People entitled to receive the property or assets from another person who has died
Heirs
A will that is handwritten
Holographic will
A tax-sheltered retirement plan to which working people make annual contributions of u to $5500 per year
Individual retirement account
What are taxes levied by states against heirs who receive all or part o an estate?
Inheritance taxes
A person who dies without having a valid will is said to die
Intestate
Self-employed individuals and their employees may contribute to
Keogh plan
A legal document that authorizes another person to act on your behalf in your absence
Power of attorney
A court process when a will validated and processed
Probate
Provides a homeowner with tax-free income in the form of a loan to be paid back when the property is sold
Reverse mortgage
What is a retirement plan for small businesses?
SEP
What is a trust that takes effect when a person dies
Testamentary
The person who makes or draws a will
Testator
A person can change his or her will at a later time, using a codicil or writing a new will
True
An estate must be worth more than a certain amount to be subject to federal estate taxes
True
Inflation is a major concern to people on fixed retirement income
True
With a reverse mortgage, you can receive payments equal to your equity
True
A certain number of years or other condition of employment has passed makes an employee
Vested
A legal document that tells you how you want your estate to b divided in the end
Will
