Chapter Exam - Retirement Plans

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

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

59 1/2

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

60 days

Traditional Individual retirement Annuity (IRA) distributions must start by

April 1st of the year following the year the participant attains age 70 1/2

In a qualified retirement plan, the yearly contributions to an employers account:

Are restricted to maximum levels set by the IRS

A 55 yr 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

Which of the following is TRUE about a qualified retirement that is "too heavy"?

More than 60% of plan assets are in key employee accounts

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

Ordinary income tax and a 10% tax penalty for early withdrawal

Which of the following is TRUE of the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

The account can be rolled into the surviving spouse's IRA

A qualified profit-sharing plan is designed to

allow employees to participate in the profits of the company