Group Life Insurance, Retirement Plans, And Social Security Disability Program. Flashcards

1
Q

What are the income tax benefits of a qualified plan?

A

Employer contributions are tax deductible and are not taxed as income to the employee. The earnings accumulate tax deferred.

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2
Q

SIMPLE plans are available to groups of how many employees?

A

No more than 100.

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3
Q

If a retirement plan is qualified, what does that mean?

A

The plan has favorable tax treatment.

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4
Q

What qualified plan is suitable for the self - employed?

A

HR - 10 or Keogh.

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5
Q

What are the consequences of withdrawing funds from a traditional IRA prior to the age of 59 1/2?

A

10% penalty.

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6
Q

What is the primary purpose of a 401(k) plan?

A

Provide retirement income.

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7
Q

For a retirement plan to be qualified, it must be designed for whose benefit?

A

Employees.

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8
Q

Who qualifies for tax-sheltered annuities, or 403(b) plans?

A

Employees of nonprofit organizations under section. 501(c)(3) and employees of public school systems.

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9
Q

An employer is sponsoring a qualified retirement plan for its employees where the employer contributes money whenever the business has profit. What is this type of plan called?

A

Profit sharing plan.

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10
Q

In what forms of payment must the contributions to a tradicional IRA be made?

A

In cash.

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11
Q

What are some examples of qualified plans?

A

IRA, 401(k), HR-10(Keogh), SEP, Simple.

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12
Q

In qualified plans, are employer contributions taxed as income to the employees?

A

No, employer contributions are not taxed as income to the employees.

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13
Q

What is the penalty for excessive contributions t9 a traditional IRA?

A

6%.

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14
Q

What type of plan is 401(k)?

A

Qualified profit-sharing plan.

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15
Q

What is required to qualified and individual to contribute to a traditional IRA?

A

Earned income.

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