HDFS 454: Exam 3
Includes Social Security Tax and Medicare Tax
FICA Taxes
Life Insurance: The amount of coverage given in the event of the policy holder's death
Face Amount
Employer Responses to Work-Life Balance: - Benefits plans developed for male breadwinner family - Ex. cafeteria style benefits and choices - Breaking of the social construct
Flexible Benefits
Refers to being able to permanently leave the workforce in old age, a relatively new phenomenon
Full Retirement
What are the components of the "three-legged stool"?
Government, employer, personal
What does the following filing status refer to? unmarried, supports qualified dependent(s); lower tax rates compared to single
Head of household
Name some of the needs to be met when an untimely death takes place, why should you have life insurance?
Helping family continue with their lives free from the financial burden that your death would bring (final expenses, income replacement, debt repayment, college expenses, etc.)
What is included in the Personal component of retirement?
IRA (Traditional or Roth)
When should you choose to itemize your taxes?
If qualifying deductions are greater than standard deductions
What does it mean when items are dealt with through the Right of Escheat?
If someone dies with no surviving relatives, the estate goes to the state
State laws set in place if no will is present
Intestacy
If you are a taxpayer with the following circumstances, what should you do? - Has a high net worth - Owns a house: paid interest and taxes on your home - Has high (uninsured) medical and dental expenses
Itemize
Possessions belonging to two surviving owners, each person owns the whole asset, will and intestacy rules do not matter
Joint Ownership
Employer Responses to Work-Life Balance: - Personal leave beyond FMLA - Study/service leave
Leave Time
Cash-Value Insurance: - Premiums paid for a period of time (20-pay life policies, paid-at-65 policies) - Protected for life
Limited-Pay Insurance
Name the types of cash value life insurance that were covered in lecture.
Limited-Pay Insurance, Adjustable Insurance, Universal Insurance, Variable Insurance, Variable-Universal Insurance
Being without work for six months or longer while actively looking for a job
Long-Term Unemployment
1. Persons not in the labor force 2. Want and are available for work 3. Looked for a job (prior 12 months)
Marginally Attached Workers
What does the following filing status refer to? married, joined return
Married filing jointly
What does the following filing status refer to? married, separate return; typically higher taxes
Married filing separately
Our country's health insurance program for people age 65 or older and younger people receiving disability benefits, both employee and employer contribute (1.45%)
Medicare
What are the qualification of FMLA for the workplace?
Must have 50+ employees
What are the qualification of FMLA for the worker?
Must work at least 12 months and 1,250 hours to qualify
What are the advantages of a Defined Benefit Plan?
No risk, continuous monthly sum, protected (by the Pension Benefit Guaranty Corporation)
What are the unique challenges facing un-or-underemployed older workers?
No time to recover after losing retirement and 401k, and often last to be re-employed
Proportional Tax
Not every dollar is taxed at the same rate
Neither employed nor unemployed in the labor force (retired persons, students, care takers)
Not in the Labor Force
What are the three most popular ways to file your taxes?
Paper, E-filing, Tax Preparer
Name the four major finding from the Root et. al. study of displaced workers
Persons 20+ years old, lost work due to a plant or company closing or moving, insufficient work to sustain, position/shift abolished
Life Insurance: Contract between issuer and policy holder stating terms and dollar amounts
Policy
Life Insurance: Owner of policy who retain all rights given by the policy
Policy Holder
Forms of Ownership: - Personal/tangible property - Included in the will or intestacy
Possession
Life Insurance: Charge to the policy holder for insurance coverage
Premium
How are state taxes paid?
Prepaid through a proportional or flat system (MI is flat tax at 4.25%)
How are federal taxes paid?
Prepaid, deducted during the payroll process, deposited directly into government accounts
What are the three stages of work friendly programs?
Programmatic Response, Integrated Response, Changed Culture
Progressive Tax
Taken out throughout the year
Directly cut the amount of tax that you owe.
Tax Credits
Reduce the amount of taxed income.
Tax Deductions
What is your taxable income?
Tax paid on the last dollar earned
What is a pure protection life insurance plan that has a specified end date?
Term Life Insurance
Identify and define the five theories of leadership.
Theory X and Y, Three-Factor Theory, Dimensional Model, Path-Goal Theory, Situational Leadership Theory (SLT)
Type of Personal Plan: - Offers tax deferred growth (pay taxes later, taxed at withdraw) - Withdrawals can't begin until 59 and a half and must begin no later than 70 and a helf - Income and age limited - Tax deductible - Maximum contribution set in place
Traditional IRA
What are the two main individual retirement accounts?
Traditional and Roth IRA
Identify and define the two leadership styles.
Transactional (cold, common top-down format) and Transformational (leaders cast vision and provide inspiration)
A legal way of managing and transferring assets over time
Trust
Refers to workers who are overqualified for their position, underpaid, or working part-time when full time is desired
Underemployment
1. Individuals do not have a job 2. Individuals are actively looking for employment (4 weeks) 3. Individuals are available for work
Unemployed Workers
Name the two industrialized countries that were presented in lecture without paid leave.
United States and Australia
Cash-Value Insurance: - Pure protection (term) - Cash-value (whole) - Variability of face value, rate of cash value, premiums, and rate of return
Universal Insurance
Describe the challenges of FMLA.
Unpaid, eligibility requirements are disproportionate to women, leave is short in comparison to other countries, employees need to give a thirty day notice
Cash-Value Insurance: - You choose your investments - Face value and cash-value may vary - Must have knowledge of markets
Variable Insurance
Cash-Value Insurance: - Choice in investments - Higher returns - Most popular - Higher commissions and annual fees
Variable-Universal Insurance
A written document that provides instructions on how one desires for their assets to be distributed after their death
Will
What were the three ways in which working families have adjusted their standards of living overtime?
Women joined the workforce, hours increased, families relied on home values
What is the range of federal tax brackets?
10% to 37% (0-9,525 and over 500,000)wha
Employer Responses to Work-Life Balance: - An issue similar to childcare - Less predictable and more expensive
Elder Care Benefits
Employer Responses to Work-Life Balance: - Originally alcohol and drug counseling - Parent education, mental health, workplace issues - Importance of confidentiality
Employee Assistance Programs
What are the disadvantages of a Defined Benefit Plan?
Employer needs to invest wisely, changing jobs, and employer benefited on additional money
What is the difference between tax reductions and tax credits?
A deduction reduces the amount of income you pay taxes on, and a credit is a dollar-for-dollar reduction in the amount of tax you owe
Employer Responses to Work-Life Balance: - One single solution does not work for everyone - On site or near site options - Vouchers or subsidies - Dependent Care Assistance Plans (DCAP) - Benefits and personnel policies
Child Care Related Benefits
Cash-Value Insurance: - Allowed to adjust premiums, face amount, and cash value accumulation - Changes to one area affect all areas
Adjustable Insurance
Describe the strengths of FMLA.
Allows leave for a variety of family medical reasons, gender neutral policy, paid leave improves worker retention
Employer Responses to Work-Life Balance: - Flextime (within day, week, year) - Part time - Job sharing - Off site work
Alternative Work Schedules
Explain what is meant by the strategy "buy term and invest the rest"
Choose the cheaper option and invest the difference
A person or organization to receive benefit
Beneficiary
Forms of Ownership: - Beneficiary is named - Contingent beneficiary can be named - Review annually - Will and intestacy rules do not matter
Beneficiary Designation
List the four main reasons unemployment is under-reported.
Counts those LOOKING for work, mobility of unemployed, severely unemployed not counted, regional differences
Which life insurance plan has a higher premium?
Cash-Value
What type of life insurance is permanent/whole coverage that does not need to be renewed?
Cash-Value Life Insurance
What countries are examples of the best and worst in parental leave?
Croatia (best) and United States, Lesotho, Swaziland (worst)
Individuals not looking for work because they believe there are no jobs available for them
Discouraged Workers
Collected on a supplementary survey (every 2 years) 1. Persons 20+ years 2. Lost work due to a plant or company closing or moving 3. Insufficient work to sustain 4. Position/shift abolished
Displaced Workers
What does it mean to die intestate?
Dying without a legal will
List the benefits of a will.
Easiest and most inexpensive, good for uncomplicated situations, provides instructions to the court
Define the elements of the DIME Model.
D: Dependents, debt, death (cost of funeral/burial) I: Income (cover all dependents), business M: Mortgage E: Education, events
Life Insurance: The amount that will be paid to the beneficiary
Death Benefit
What includes the following: - Pensions - Based on a formula of years of service - Pays lifetime monthly payments - Used to be standard, now the exception
Defined Benefit Plan
What is included in the Employer component of retirement?
Defined Contribution (401k) or Defined Benefit (pension)
What includes the following: - Many offer matching contributions - Retirement investments include stocks, growth, bond, money market, etc. - Includes 401(k), 403(b), 457, and Simple IRA
Defined Contribution Plan
Describe the Needs Assessment approach to retirement planning.
Depends on your goals, needs, wants, and values
List some of the mental/emotion and financial implications of unemployment.
Depression/anxiety, loss of self-esteem, and increased stress, strain, and conflict
What are the main characteristics of the federal income tax system?
Proportional, progressive, prepaid
List the benefits of a trust.
Provides privacy to heirs, avoid probate and transfer assets to beneficiaries, have assets managed for you, reduce estate tax
What were some of the ways discussed for how to "keep your wealth"?
Reduce total income, reduce gross income, reduce adjusted gross income
List the benefits of work-life programs/policies.
Respond to changing demographics Recruit and retain Remain competitive Support diversity efforts. Increase productivity Enhance morale and quality of life Reduce burn out Improve worker commitment Reduce health care costs
Type of Personal Plan: - Non-deductible, after tax - Funds grow tax free (pay taxes now, no deductible) - Withdrawals taken for free IF taken at 59 and a half or later - No age limit for contributions - Tax free withdrawal
Roth IRA
What does the following filing status refer to? unmarried, no dependents
Single
Created to promote the economic security of the nation's people, tax is contributed from both the employee (6.2%) and employer (6.2%)
Social Security
What is included in the Government component of retirement?
Social Security
What is included in FICA taxes?
Social Security and Medicare
Any property belonging to an individual only - such as real estate, brokerage accounts, bank accounts, stocks, and bonds
Sole Ownership
Describe the three stages of work-friendly programs: - Considered a women's issue (ex. childcare) - Separate, not integrated
Stage 1: Programmatic Response
Describe the three stages of work-friendly programs: - Moves beyond childcare - HR person holds responsibility - Package of several policies
Stage 2: Integrated Response
Describe the three stages of work-friendly programs: - Life cycle approach to work issues - Entire workplace more flexible - Strategically linked to planning
Stage 3: Changed Culture
Refers to a floored deduction set by Congress that varies by filing status (single, married, etc.), age (younger or older than 65), and vision
Standard Deduction
Refers to a mismatch between the employer and employee; some jobs are available, but workforce preparedness does not match (lack requisite skills, unwilling to travel for work, wages too low)
Structural Unemployment
Describe the feedback loop that occurs between the family life sphere and work sphere.
The idea that stress and success from one sphere will affect the other
What are the advantages of a Defined Contribution Plan?
You decide, benefit from tax free growth, pre-tax money, keep money if you change jobs
What are the disadvantages of a Defined Contribution Plan?
You need to make wise decisions, ups and downs of the market, tempted to use/spend gains
