Retirement Flashcards
Fully and currently insured SSI
Full insured for life 40 credits
Currently insured at least 6 quarters during the full 13 quarter period
Child has earned income from parents sole prop or partnership?
They will not pay social security tax but may be subject to federal income tax. If employed by a unincorporated business
Disability benefits from ss
Under 65 and been disabled for 12 months and is expected to be disabled for at least 12 months or a disability which is expected to result in death. 5 month waiting period applies.
Spouse and child eligibility
Spouse of a retired or disabled worker qualifies if they’re age 62 or have a child in their care under 16 or 16 and older and disabled.
Surviving spouse of a deceased spouse can start getting benefits at 60 or if they have a child under 16 or disabled before age 22.
Divorced? Married 10 years min and divorced 2 years can start drawing off their benefit even if they’re not drawing yet.
Dependent eligibility, under 19 and full time student not college or age 18 or over but has a disability that began before 22
PIA calculation
Spouse entitled to their spouses benefit 50% of their PIA at full retirement age.
6.67% decrease per year till 64 from 67 the from 64 to 63 5% and 63 to 62% 5%
If the spouse passes first they will get the greater of her benefits or 100% of his benefits
Social security taxation
This includes the SS Survivor benefits and disability benefits from the government
To include 50% of benefits in taxable income
25k MAGI for single
32k MAGI for joint
To include 85% of benefits in taxable income
34k for single
44k for joint
Defined benefit plan
Max comp- Uses last three years of comp add together and divide by 3 to get your benefit
Unit benefit formula multiply years of service times benefit then multiply that by salary to get benefits
Hardship withdrawals
Can only come from 401k and 403b not profit sharing has to have 401k provisions
Solo 401k
Plan allows two different contributions elective deferral up to 23k plus the employer contribution 25% with a hard cap of 69k total. 7500 catch up allowed but has to be included in 69k where as other plans it adds to the top of 69
ESOP within a S corp
It’s allowed and the esop counts as 1 shareholder of 100 no matter how many employees there are
Simple plan
Premature distribution in the first 2 years is a 25% penalty
Sep vs simple
Sep can be integrated with SS
Simple can not
ESOP also can’t be integrated with SS
Ratio percentage test
Average benefits test
Ratio percent says the plan must cover a percent of non highly comped employees at least 70% of the percent of highly comped employees covered
Average benefits says for all non highly comped employees must be at least 70% of that for highly comped employees
Adp/acp testing
Nhce 0-2% times 2
Nche 2-8 is plus 2
This gets you to the figure the highly comped employees can put away
Annual additions
Limited to the lesser of 100% of comp or 69k
