Qualified Plans

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee

If a retirement plan or annuity is "qualified", this means

It is approved by the IRS

Rollover

Withdrawing the money from a qualified plan and placing it into another qualified plan.

All of the following statements are true regarding tax-qualified annuities EXCEPT

Employer contributions are not tax deductible

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits

Gross Income

the total amount of income from wages before any payroll deductions

Which of the following is NOT true regarding non qualified retirement plan?

It needs IRS approval

Which of the following is an IRS qualified retirement program for the self-employed?

Keogh

Taxation

Benefits in qualified plans are taxable to the plan participant when they are

An IRA purchased by a small employer to cover employees is known as a

Simplified employee pension plan

An Internal Revenue Code provision hat specifically provides for an indv retirement plan for public school teachers is a(n)

403(b)

2 attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only

Pretax contribution

contribution made before federal and/or state taxes are deducted from earnings

Earned Income

salary, wages, or commissions; but not income from investments, unemployment benefits, and similar sources of income

Which of the following scenarios will incur a 10% tax penalty on distributions

Distributions are made on a policy before age 59 1/2

Self-Employed Plan

Plan allows for self-employed individuals to fund their retirement programs with pre-tax dollars as if under a corporate retirement or pension plan

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money wherever a profit is realized. What is this called?

Profit sharing plan

For a retirement plan to be qualified, it must be designed for whose benefit?

Employees

Which type of retirement account does not require the owner to start taking distributions at age 72?

Roth IRA

Employer contributions made to a qualified plan

Are subject to vesting requirements

Indv Qualified Plans - IRA & Roth IRA

Anybody with earned income can contribute to either plan

Simplified Employee Plans

Type of qualified plan suited for small employer or for the self employed to establish & maintain an indv retirement account

SIMPLE plans require all of the following EXCEPT

At least 1,000 employees.

Which of the following applicants would NOT qualify for a Keogh Plan?

Someone who works 400 hours per year

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation of accumulation

A 403(b) plan, commonly referred to as a TSA, is available to be used by

Teachers & non-profit organizations

SIMPLE Plans

Savings incentive match plans for employees of small employers, a type of qualified retirement plan.

a 35 yo spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. What penalties, if any, will she have to pay?

No penalties

All of the following would be eligible to establish a Keogh retirement plan EXCEPT

The president and employee of a family corporation

nonprofit organization

Institution that functions much like a business, but does not operate for the purpose of generating profits

Vesting

The right of a participant in a retirement plan to retain part or all of the benefits

If a co has a Simplified Employee Pension plan, what type of plan is it?

A qualified plan for small business

Profit Sharing and 401k plans

A 401(k) Plan is a defined contribution plan for employees of for-profit companies. It is an elective deferral plan or salary reduction. 401(k) Plans also can be profit-sharing plans allowing an employee a choice between taking income in cash or putting the income into a qualified plan and deferring that portion of income.

If a co has a simplified employee pension plan, what type of plan is it?

A qualified plan for small business

Traditional IRA

Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.

What is the primary use of a 401(k) plan?

Retirement

All of the following may use a 403(b) plan for their retirement EXCEPT

The CEO of a private corporation

Roth IRA

A personal savings plan; contributions are not tax-deductible; earnings are tax-free

Under the 401(k) bonus or thrift plan, the employer will contribute

An undetermined % for each dollar contributed by the employee

Which of the following statements concerning a simplified employee pension plan (SEP) is INCORRECT?

SEP's are suitable for large companies

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

They are tax deferred until withdrawn