Retirement Plans

A Roth IRA owner must be at least what age in order to make tax-free withdrawals?

59 1/2 and owned account for a minimum of 5 years

A rollover from a Traditional IRA to another IRA MUST be done within _______ days to avoid tax consequences.

60 Days

Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequence?

60 Days

Within how many days must a rollover be completed in order to avoid being taxed as current income?

60 Days

Which of the following employers is required to follow ERISA regulations?

A local supply company with 12 electrical employees would be subject to ERISA.

Erica is 35 years old and owns an IRA. At what age can she begin to receive distribution without a tax penalty?

59 1/2

Which of the following would disqualify a company's retirement plan from receiving favorable tax treatment?

It is temporary

Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in a lower tax bracket. Which benefit fits this description?

Deferred compensation option. A deferred compensation option enables an employee to defer current receipt of income and have it paid at a later date, when presumably the employee will be in a lower income tax bracket.

An example of a tax-qualified retirement plan would be a (n)

Defined contribution plan

Which of these statements concerning Traditional IRAs is CORRECT?

Earnings are taxable when withdrawn

Which of the following is NOT a federal requirement of a qualified plan?

Employee must be able to make unlimited contributions -Exceptions include: -Must be benefit a broad cross-section of employees -Vesting schedule must be defined -Employer establishes the plan

When a qualified plan starts making payments to is recipients, which portion of the distributions is taxable?

Gains. Gains are the taxable portion of the distributions of qualified plans.

Mike has inherited his father's traditional IRA. As beneficiary, he will pay ____ taxes on any money withdrawn.

Income. An income tax is paid when money is withdrawn when a beneficiary inherits a traditional IRA.

How are contributions made to a Roth IRA handles for tax purposes?

Not tax deductible

Which of these retirement plans do NOT qualify for a federal income tax deduction?

Roth IRA Exceptions include: -Simple plan -Traditional IRA -Keogh Plan

All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT:

Stock purchase. Withdrawing funds from a qualified plan for the purpose of purchasing stocks or other securities would trigger a 10% tax penalty.

Who were Keogh plans designed to provide pensions for?

The Self-Employed (individuals)

Under a Traditional IRA ; interest earned is taxed

Upon distribution. Interest earned on a Traditional IRA is taxed upon distribution at ordinary income tax rates.