Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CFP > Retirement > Flashcards

Retirement Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Are money-purchase pension plans DC or DB plans?

A

Defined contribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Are cash balance pension plans DC or DB plans?

A

Defined benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Are 457 plans qualified or nonqualified?

A

Nonqualified

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How many credits to be fully insured for Social Security?

A

40 credits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Employment categories not covered by Social Security

A
  • Railroad employees (but are eligible for medicare)
  • A child, under age 18, employed by a parent in an unincoroprated business
  • Religious employees if they claim an exemption
  • Members of tribal councils (native americans)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The spouse of a retired or disabled worker is eligible for SS if he/she:

A
  • is age 62 or above or
  • has a child in care under age 16 or age 16+ and disabled
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Surviving spouse of a deceased insured worker qualifies for SS payments if:

A
  • If the widow(er) is age 60+
  • At any age if caring for a child under age 16 or disabled before age 22
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Surviving dependent of a deceased insured worker qualifies for SS if the child is:

A
  • Under age 19 and a full-time elementary or secondary school student (not college!) or
  • age 18 or over but has a disability which began before age 22
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Taxation of SS benefits

A

If a person’s income plus 1/2 SS benefits is more than MAGI $25k single/$32k MFJ, 50% of benefits will be included in benefits

If a person’s income plus 1/2 SS benefits is more than MAGI $34k single/$44k MFJ, 85% of benefits will be included in benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Does MAGI for taxation of SS benefits include muni bond interest?

A

Yes!!! MAGI = AGI + Munis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Maximum employer deduction for money-purchase pension plan

A

up to 25% employer deduction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Are contributions in a money-purchase pension fixed or flexible?

A

Fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Is stable cash flow needed in a money-purchase pension plan?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Maximum employer deduction in a target benefit plan pension

A

Up to 25% employer deduction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Are contributions fixed or flexible for target benefit pensions?

A

Fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Is stable cash flow needed in a target benefit pension plan?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Do target benefit pension plans favor older or younger employees?

A

Older

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Maximum employer deduction for profit-sharing plan

A

Up to 25%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Are contributions fixed or flexible for profit-sharing plans?

A

Flexible (must be recurring and substantial)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Maximum employer deduction for stock bonus plans

A

Up to 25% employer deduction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Are contributions fixed or flexible in a stock bonus plan?

A

Flexible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Can stock bonus plans be integrated with SS or cross-tested?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Maximum employer size that can have a SIMPLE IRA

A

100 employees or fewer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Vesting schedule for SIMPLE IRA contributions

A

Immediate vesting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Salary reduction limit for SIMPLE IRA

A

$15,500

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Can a company with a SIMPLE IRA have another retirement plan?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Is employer match required in a SIMPLE IRA

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

SEP IRA maximum employer contribution

A
  • Up to 25% for owner (W2)
  • Up to 18.59% for self-employed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Vesting schedule for SEP IRA

A

Immediately vested

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Can SEP IRAs be integrated with SS?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Eligibility to be in a SEP IRA

A

21+ years old, paid at least $750, and worked 3 out of the 5 prior years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

SARSEP maximum employer size

A

Up to 25 employees, and 50% of employees must defer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

SARSEPs must have been in existence before ___

A

1997

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

SARSEP salary deduction limit

A

$22,500 (FICA)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Are 403(b) plans subject to ERISA?

A

Only if employer contributes

36
Q

Can employees contribute to a SEP IRA?

A

No, employer contributions only

37
Q

Can 403(b)s have a vesting schedule?

A

Yes, employer contributions may be subject to vesting schedule

38
Q

Are 403(b)s qualified?

A

No, but they act like they are

39
Q

Defined benefit pension plan maximum limit on projected annual benefit

A

Lesser of $265k or 100% of the participant’s comp averaged over 3 highest earning years

Only the first $330k of compensation can be taken into consideration

40
Q

How can forfeitures be used in a defined benefit retirement plan?

A

Forfeitures must be used to reduce employer contributions

41
Q
A
42
Q

What is guaranteed by the employer for a cash balance pension plan?

A

Contribution level and minimum rate of return

43
Q

Maximum annual addition that an employee can receive in a money purchase plan

A

lesser of 100% of salary or $66k

44
Q

Target benefit pension maximum contribution

A

Lesser of $66k or 100% compensation

45
Q

Maximum contribution to profit-sharing plan

A

Maximum of 25% of all participants compensation. Only the first $330k of each employees comp can be taken into account for purposes of this limit

46
Q

Can employees contribute to profit-sharing plan?

A

No, unless there is a 401(k) option

47
Q

Age and amount for catchup contribution in 401(k)

A

Age 50, $7500

Catch-up contribution is not included in calculating employer deduction limits (25% comp) or contribution limits ($66k or 100% comp)

48
Q

What type of plan can hardship withdrawals come from?

A

401(k) and 403(b) only

49
Q

Maximum contribution for a 15% plan (self-employed/Keogh)

A

15% plan = 12.12%

50
Q

Maximum contribution for a 25% plan (self-employed/Keogh)

A

20% plan = 18.59%

51
Q

For QUALIFIED plans, what age can someone retire and not pay early withdrawal penalties on distributions?

A

Age 55

52
Q

ACP/ADP non-discrimination testing shortcut

A

If average NHCE deferrals are 0-2%, multiply by 2

If average NHCE deferrals are 2-8%, add 2

53
Q

Cross-tested/new comparability plan forumula

A

NHCEs must receieve either 5% or 1/3 of the HCE’s percentage contribution, whichever is lower

54
Q

Which plans can be integrated with Social Security?

A
  • Defined benefit
  • Cash balance
  • Money purchase
  • Target benefit
  • Profit sharing
  • Stock bonus
  • SEP
55
Q

Which plans cannot be integrated with Social Security?

A
  • ESOP
  • SIMPLE
  • 401(k) SIMPLE
56
Q

Average benefits test

A

The average benefits of all NHCEs must be at least 70% of that for HCEs

57
Q

What is a highly compensated employee?

A
  • Greater than 5% owner or
  • Any employee earning in excess of $150k per year
58
Q

What is a key employee?

A
  • Greater than 5% owner or
  • An officer and compensation > $215k or
  • A greater-than-1% owner and compensation > $150k
59
Q

Do HCEs affect discrimination or vesting in a plan?

A

Discrimination

Affects the ADP/ACP test and the ratio/average benefits test

2nd letter in highly and 2nd letter in discrimination is i

60
Q

Do key employees affect discrimination or vesting in a plan?

A

Vesting

Affects whether a plan is top-heavy

2nd letter in key and 2nd letter in vesting is e

61
Q

Minimum benefits and contributions for non-key employees in a top-heavy plan

A

DB - benefit must provide at least 2% of compensation

DC - minimum employer contribtuion must be no less than 3%

62
Q

Permitted vesting schedules for a top-heavy DB plan

A
  • 3-year cliff
  • 2-6 year graded
  • 100% vested with 2-year eligibility
63
Q

Permitted vesting schedules for a top-heavy DC plan

A
  • 3-year cliff
  • 2-6 year graded
  • 100% vested with 2-year eligibility
64
Q

Permitted vesting schedules for a non top-heavy DC plan

A
  • 3-year cliff
  • 2-6 year graded
  • 100% vested with 2-year eligibility
65
Q

Permitted vesting schedules for a non top-heavy DB plan

A
  • 5-year cliff
  • 3-7 year graded
  • 100% vested with 2-year eligibility
66
Q

Parent-subsidiary controlled group

A

One entity (parent company) owns at least 80% of one (or more) of the other entities

67
Q

Brother-sister controlled group

A

Five (or fewer) owners of two or more entities own 80% or more of each entity

68
Q

Affiliated service group

A

A service organization and a professional organization

69
Q

Percentage limits for life insurance to be incidental in a DC plan

A

Aggregated premiums paid for participant’s insured death benefit
- Ordinary life (whole life) - 50%
- Universal life - 25%
- Term life - 25%

70
Q

Limits for life insurance to be incidental in a DB plan

A

The participant’s insured death benefit must be no more than 100 times the expected monthly benefit

71
Q

Do business owners need to take RMDs on their qualified plan?

A

Yes, if they are over 5% owners

71
Q

Can 457 plans be rolled over?

A

Government 457 plans can be rolled into another type of retirement account, but non-government 457 plans cannot

72
Q

Are RMDs required on IRAs if still working?

A

Yes!

72
Q

How much can be donated via QCD?

A

$100k annually

73
Q

Age eligible to make QCDs

A

Age 70.5 and older (not 73)

74
Q

Qualified plan loans

A

Total loans cannot exceed the lesser of 50% of vested plan balance or $50k

A special rule allows participants with small accounts to borrow up to $10k without regard to percentage limitation (assuming $10k is available in the account)

75
Q

Permitted disparity for a DB plan

A

Lesser of base benefit percentage or 26.25%

76
Q

Permitted disparity for a DC plan

A

Lesser of the base contribution percentage or 5.7%

77
Q

What is pension max?

A

Elexting a singlke life annuity and using part of the higher monthly benefit to purchase life insuranxe on the employee’s life

78
Q

What are the slower vesting schedules?

A
  • 5-year cliff
  • 3-7 year graded
79
Q

What type of entities are able to sponsor a 403(b) plan?

A
  • Churches
  • Private schools
  • State colleges
  • Hospitals

Governmental employers are not allowed to sponsor a 403(b), only nonprofits

80
Q

What type of entities can sponsor a 457 plan?

A
  • Private schools
  • State colleges
  • Governmental employers
  • Hospitals

Churches cannot sponsor a 457, but they can use a 403(b) plan

81
Q

The one-time election out of substantially equal payments allows a participant to switch from?

A

Annuity to RMD method

82
Q

Which type of retirement plans require QJSA (Qualified Joint and Survivor Annuity) for the plan participant spouse?

A

Qualified Pension Plans

83
Q

In a Rabbi Trust, the participants has the same rights as ___?

A

An unsecured creditor

CFP (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions