Chapter 9 Retirement Plans

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days

An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$2,500 (10%)

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20%

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

Employee

Which of these retirement plans can be started by an employee, even if another plan is in existence?

IRA

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

If Tom's employment is terminated, 20% of the funds would be forfeited

At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in:

Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:

profit-sharing plan

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

59 1/2