life & health ch 21

At what age can a person first withdraw funds penalty free from a tax qualified retirement account, such as an IRA, Keogh, SEP, 403(b),or 401(k)?

59.5

which of the following has a death benefit?

A Variable Life policy

Which of the following businesses would NOT be eligible for a Keogh Plan?

A publicly traded corporation.

Why are SEPs preferred over Keogh Plans by small business owners?

The SEP is less complicated.

under an IRA

payouts must begin by 72

which of the following is true about a traditional IRA?

Contributions are generally tax-deductible and the balance grows tax-deferred.

Which retirement plan can be funded for the benefit of an unemployed spouse?

IRA

which retirement planning option is always available regardless of participation by the employer?

IRA

The IRA is designed for which persons?

Individuals with earned income.

Which of the following retirement plans is designed for a small business owner?

Keogh Plan

another name for a retirement plan for an unincorporated small business is?

Keogh plan

New point not in text - be sure to read the explanation! A 45 year old may withdraw from a qualified retirement plan, without tax penalty, to pay for all of the following EXCEPT?

New car purchase or lease

The main difference between Non-Qualified retirement plans and Qualified retirement plans is:

Qualified plans feature special tax treatment and Non-Qualified plans do not.

What type of retirement plan does not require that withdrawals begin by age 72?

Roth IRA

New point not in the text - be sure to read the explanation! A business has established a pension (retirement) plan for its employees. As a result, it has a "qualified" plan which permits money in the retirement plan to grow on a tax-deferred basis. Which of the following would result in the plan losing its tax-deferred status?

The plan is temporary.