Group Life Insurance, Retirement Plans, And Social Security Disability Program. Flashcards
What are the income tax benefits of a qualified plan?
Employer contributions are tax deductible and are not taxed as income to the employee. The earnings accumulate tax deferred.
SIMPLE plans are available to groups of how many employees?
No more than 100.
If a retirement plan is qualified, what does that mean?
The plan has favorable tax treatment.
What qualified plan is suitable for the self - employed?
HR - 10 or Keogh.
What are the consequences of withdrawing funds from a traditional IRA prior to the age of 59 1/2?
10% penalty.
What is the primary purpose of a 401(k) plan?
Provide retirement income.
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees.
Who qualifies for tax-sheltered annuities, or 403(b) plans?
Employees of nonprofit organizations under section. 501(c)(3) and employees of public school systems.
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?
Profit sharing plan.
In what forms of payment must the contributions to a tradicional IRA be made?
In cash.
What are some examples of qualified plans?
IRA, 401(k), HR-10(Keogh), SEP, Simple.
In qualified plans, are employer contributions taxed as income to the employees?
No, employer contributions are not taxed as income to the employees.
What is the penalty for excessive contributions t9 a traditional IRA?
6%.
What type of plan is 401(k)?
Qualified profit-sharing plan.
What is required to qualified and individual to contribute to a traditional IRA?
Earned income.
