Retirement Concepts
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit sharing plan
Which type of retirement account does not require the owner to start taking distribution at age 72?
Roth IRA
Which type of retirement account does not require the owner to start taking distributions at age 72?
Roth IRA
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs are suitable for large companies.
Who may contribute to a Keogh (HR-10) plan?
Self-employed plumber
Which of the following applicants would NOT qualify for a Keogh Plan?
Someone who works 400 hours per year
The advantage of qualified plans to employers is
Tax-deductible contributions
A 403(B) plan, commonly referred to as a TSA, is available to be used by
Teachers and not-for-profit organizations.
All of the following employees may use a 403 (b) plan for their retirement EXCEPT
The CEO of a private corporation.
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred.
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution.
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
They are tax deferred until withdrawn.
A 35-year-old 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
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit Sharing plan
What is the primary purpose of a 401(k) plan?
Retirement
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension plan.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation.
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for employee, but are taxable upon distribution.
Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages?
3
An Internal Revenue Code provision that specially provides for an individual retirement plan for public schools teachers is a(n)
403(b) Plan (TSA)
If a company has a Simplified Employee Pension plan, what type of plan is it?
A qualified plan for a small business.
Under the 401(k) bonus or thrift plan, the employer will contribute
An undetermined percentage for each dollar contributed by the employee.
Employer contributions made to a qualified plan
Are subject to vesting requirements
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only.
For a retirement plan to be qualified, it must be designed for the benefit of
Employees.
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible.
Two 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)
Two attorneys operate their practices 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)
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
If a retirement plan or annuity is "qualified," this means
It is approved by the IRS
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval.
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
