cram Flashcards
<p>Tax treatment of Annuitizing</p>
<p>Portion of each payment is tax-free, and the other portion is taxable at ordinary income</p>
<p>No capital event occur in</p>
<p>Annuities</p>
<p>What if I work for a non-profit 503c3</p>
<p>Eligible to contribute to a 403b plan</p>
<p>regulated by state insurance commissioner</p>
<p>Fixed annuity</p>
<p>regulated by state insurance commissioner finra and sec</p>
<p>Variable</p>
<p>Vesting scheduled by years of service gives you certain percentages as years employed with company</p>
<p>Graded vesting</p>
<p>Vesting Scheduled by years of service at o until certain years of service than 100 percent</p>
<p>Cliff vesting</p>
<p>Traditional IRAs</p>
<p>Contribute the lesser of 5000 or 100percent of earned income contributions may or may not be tax-deductible. ( if not an active participant in a qualified plan, contributions are tax-deductible) Taxed deferred growth</p>
<p>Catch up provisions</p>
<p>age 50 plus can contribute an additional 1000 per year</p>
<p>Irs Tax Penalties</p>
<p>Excess Contributions 6%</p>
<p>Roth IRAs</p>
<p>can contribute the lesser of 5000 or 100% of earned income Contributions are always non tax-deductible. Tax deferred growth. Qualified distributions are tax-free</p>
<p>Inflation means</p>
<p>Hedge against would be Precious metals fund</p>
<p>monthly income</p>
<p>GNMA fund</p>
<p>new house, park $</p>
<p>Money market fund</p>
<p>Maximum diversification</p>
<p>Asset allocation fund</p>
<p>Familiar names</p>
<p>Blue chip fund</p>
<p>Broad exposure, low cost, passive</p>
<p>Index fund</p>
<p>Qualified</p>
<p>tax deductible contributions. earnings grow tax deferred , Zero cost basis, entire amount taxed at distribution "ordinary income tax bracket</p>
<p>Non-qualified</p>
<p>Already taxed by IRS </p>
<p>subject to legislative risk</p>
<p>Sector funds</p>
<p>invest in companies that produce gold, silver and other precious metals</p>
<p>Precious metals fund</p>
<p>invest in bonds issued by corporations yields are typically higher than treasury funds may be high grade or high yield</p>
<p>corporate bond funds</p>
<p>offers higher yields than other traditional government funds</p>
<p>GNMA Funds</p>
<p>Types of Qualified Plans</p>
<p>Killed the face amount certificate co's</p>
<p>Private securities transaction or when a rr sells something Privately</p>
<p>Written notification to firm </p>
<p>Opening Outside account</p>
<p>Permitted by finra, but some firms prohibit,</p>
<p>Code of procedure</p>
<p>Violation of Conduct rules: which is B/D to public or rr to public</p>
<p>Code of Arbitration</p>
<p>violation of UPC; is BD to BD or BD carrying</p>
<p>ALL variable products are considered</p>
<p>securities and subject to prospectus delivery requirements</p>
<p>Variable contract owners may convert their policies to whole life within 2 years from the date of issuance often without presenting evidence of insurability</p>
<p>Conversion</p>
<p>Equity indexed annuities</p>
<p>returns are partially linked to a stock market index provides investors with a guaranteed minimum return tax deferred surrender charges</p>
<p>Ate age of retirement ways to take out money</p>
<p>Lump-sum=take money and run</p>
<p>Annuity pay out period</p>
<p>accumulation units are exchanged for annuity units, payments may fluctuate.</p>
<p>Being a limited partner is not a job (Passive)</p>
<p>Does not need to tell company</p>
<p>must be approved by a principal before use</p>
<p>Sales literature and advertising</p>
<p>Not joint accounts</p>
<p>UGMA/UTMA</p>
<p>advertising/marketing/trailer commissions</p>
<p>12b-1 fees no load fees of .25% max</p>
<p>12b 1 fees</p>
<p>voting for new 12b 1 fees </p>
<p>Rates not set by fed</p>
<p>prime rate </p>
<p>Lowest to Highest</p>
<p>fed funds</p>
<p>Easy money</p>
<p>lower reserve requirement </p>
<p>Tight money</p>
<p>raise reserve requirement</p>
<p>Four tools of the Fed</p>
<p>discount rate</p>
<p>education savings plan</p>
<p>Contributions are not deductible</p>
<p>can be used for any education level</p>
<p>Cordell ESA</p>
<p>state sponsored</p>
<p>section 529 Plans</p>
<p>reinvestment of capital gains</p>
<p>impact on cost basis Increases</p>
<p>on reinvestment of capital gains</p>
<p>stays the same</p>
<p>12b-1 fees</p>
<p>asset based charge </p>
<p>Break down of expense ration</p>
<p>management fee, administration fee 12b1 fees. Management fee or investment fee makes up the largest portion</p>
<p>Formulas to know</p>
<p>current yield, bond song prices of LT, discount bonds,fluctuate more in price</p>
<p>Annual Interest/Market Value</p>
<p>Current Yield</p>
<p>Bond song prices</p>
<p>Triangle</p>
<p>Net assest Value</p>
<p>(total assets-total liabilities)/# of shares outstanding</p>
<p>POP</p>
<p>NAV/(100%-SALES CHARGE PERCENTAGE)</p>
<p>Sales charge percentage</p>
<p>(pop -Nav)/POP</p>