Retirement – 48 Flashcards
Name retirement plan: Eligibility – part-time and full-time employees of public schools or 501(c)(3) organization, but not independent contractors
403(b) plan
Name retirement plan: Eligibility – all full-time employees 21 years old with one year of service must be covered
Profit sharing plan, 401(k) plan
Name retirement plan: Eligibility – Anyone with earned income, but deductible only if not an “active participant” and within AGI limits
IRA
Name retirement plan: Eligibility – All employees 21 years old, earning $550 in 3 of the last 5 years
SEP
Name retirement plan: Eligibility – Owner-employees, 10% partners, and the self-employed may establish plans; must cover full-time employees age 21 with 12 months of service
Keogh
Name retirement plan: Contribution limits – 25% of payroll; also the lesser of 100% of income or $52,000
Profit-sharing plan, 401(k) plan
Name retirement plan: Contribution limits – lesser of 100% of income or $52,000
403(b) plan
Name retirement plan: Contribution limits – $5500 ($11,000 for couples); “catch-up” provisions apply for individuals aged 50 and older
IRA
Name retirement plan: Contribution limits – Lesser of 25% of earned income or up to $52,000
SEP
Name retirement plan: Contribution limits – if defined-contribution: 25% of net income (20% of gross), the lesser of 100% of income or $52,000; if defined-benefits: minimum funding standard apply
Keogh
Name retirement plan: Salary reduction – no
Profit-sharing plan, SEP
Name retirement plan: Salary reduction – $17,500 maximum salary reduction; “catch-up” provisions apply for employees aged 50 and older
401(k) plan, 403(b) plan
Name retirement plan: Salary reduction – $17,500 maximum salary reduction; “catch-up” provisions apply for employees aged 50 and older; additional “catch-up” for employees with 15 years of service
403(b) plan
Name retirement plan: Salary reduction – if deductible, taxable income is reduced
IRA
Name retirement plan: Salary reduction – if 401K plan: $17,500; catch-up provisions may apply
Keogh
Name retirement plan: Investments – can buy life insurance and other investments
Profit-sharing plan, Keogh
Name retirement plan: Investments – employees often direct own investments through plan options; can buy limited amount of life insurance
401(k) plan
Name retirement plan: Investments – fixed and variable annuities or mutual fund shares; can have life insurance in the annuity
403(b) plan
Name retirement plan: Investments – no life insurance and no collectibles except gold, silver and platinum coins issued in the US, and gold, silver, platinum, and palladium bullion; no margin accounts
IRA, SEP
Name retirement plan: Loans – not needed because early withdrawals can be permitted after two years
Profit-sharing plan
Name retirement plan: Loans – yes
401(k) plan, 403(b) plan, Keogh
Name retirement plan: Loans – no
IRA, SEP
Name retirement plan: Early Withdrawals – yes, after two years, but subject to income tax; 10% penalty unless an exception applies
Profit-sharing plan
Name retirement plan: Early Withdrawals – no, unless for death, disability, or financial hardship; all withdrawals are taxable income; 10% penalty unless an exception applies
401(k) plan, 403(b) plan
Name retirement plan: Early Withdrawals – permitted, but is taxable income and has a 10% penalty
IRA, SEP, Keogh
(48.3) Anyone who has earned income and has not attained age ___ may make contributions to an IRA. Contributions are limited to the lesser of?
70 1/2
100% of earned income or $5,500 per year