Retirement plans Flashcards
Non-deductible contributions are typically associated with a
Roth IRA’s
Mike has inherited his father’s traditional IRA. As beneficiary, he will pay
taxes on any money withdrawn.
Income
Which of the following is NOT a federal requirement of a qualified plan?
Employee must be able to make unlimited contributions
Dana is an employee who deposits a percentage of her income into her
individual annuity. Her company also contributes a percentage into a
separate company pension plan. What kind of annuity is this considered?
Qualified retirement annuity
Erica is 35 years old and owns an IRA. At what age can she begin to
receive distributions without a tax penalty?
59 1/2
Under a 10-year vesting schedule, what percentage of employer
contributions must be vested after 10 years of service?
100%
Which of these retirement plans do NOT qualify for a federal income tax
deduction?
Roth IRA
Which of the following employers is required to follow ERISA regulations?
A local electrical supply company with 12 employees
How are contributions made to a Roth IRA handled for tax purposes?
Not tax deductible
What area of group health insurance is regulated under the Employee
Retirement Security Act of 1974 (ERISA)?
Disclosure and reporting
Within how many days must a Traditional IRA be rolled over to another
IRA in order to avoid tax consequences?
60
Retirement plans are prevented from favoring highly compensated
employees under which government regulation?
Non-discrimination 
A rollover from a Traditional IRA to another IRA MUST be done within
days to ayoid tax consequences.
60
Under a Traditional IRA, interest earned is taxed
Upon distribution
Employer contributions to qualified plans are
Tax-deductible by the employer
Which of the following would disqualify a company’s retirement plan from
receiving favorable tax treatment?
It’s temporary
ESOPs are typically invested in
Employer stock
Within how many days must a rollover be completed in order to avoid
being taxed as current income?
60
Which of these statements concerning Traditional IRAs is CORRECT?
Earnings are taxable when withdrawal
How are Roth IRA’s treated for tax purposes?
Nondeductible contributions and tax free distribution
Who were Keogh plans designed to provide pension benefits for?
Self employed
An example of a tax-qualified retirement plan would be a(n)
Define contribution plan
What does ESOP stand for?
Employee stock ownership plan.
Retirement plans cannot favor highly compensated employs. The
government regulation that prevents this from happening is called
Nondiscrimination
All of the following are exempt from the 10% tax penalty for early
qualified plan withdrawals EXCEPT
Stock purchase
When a qualified plan starts making payments to its recipient, which
portion of the distributions is taxable?
Gains
A Roth IRA owner must be at least what age in order to make tax-free
withdrawals?
59 1/2 and owned account for a min of 5 years.
Rob has a benefit at work which enables him to defer his current receipt
of income and have it paid at a later date, when he will probably be in a
lower tax bracket. Which benefit fits this description?
Deferred compensation option
