Retirement Plans Flashcards

1
Q

Qualified Retirement Plan/Account

A

Receive favorable tax treatment from the IRS

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

Life insurance generally can’t be used in a…

A

Qualified retirement plan

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

Annuities might be used to fund or distribute money from a…

A

Qualified retirement plan in various ways

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

Non-Qualified Retirement Plan/Account

A

May not receive favorable tax treatment

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

Employees and employers can deduct retirement plan contributions from…

A

Taxable income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Growth within retirement plan/account won’t be taxed until…

A

Withdrawn (tax deferral)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

When withdrawn, all money will be…

A

Taxed and treated as income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Different features might apply to…

A

ROTH IRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Retirement plans have annual limits to…

A

Contributions

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

What is the penalty if accessed prior to 59.5?

A

10% tax penalty

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

Exceptions from tax penalty include…

A

Disability, death, education, or first home

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

Withdrawals must begin by…

A

April 1st of the year the person turns 73

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

What is the penalty if withdrawals don’t start?

A

Tax penalty of 50% of what should have been withdrawn

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

Employer retirement plans must be open to…

A

All full-time employees after a certain time

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

Employee contributions belong fully to…

A

Employee

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

Employer contributions belong to employee after…

A

A few years

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

Employer plans that violate these rules are…

A

Non-qualified and won’t have favorable tax status

18
Q

Defined Benefit Plan

A

Members will know what they get at retirement

19
Q

Defined Contribution Plan

A

Members know how much will be put in but now how the account will perform

20
Q

401k’s are setup and administered by…

A

Large employers

21
Q

401k’s often include…

A

Employer matching of employee contributions up to a point

22
Q

403b is also known as…

A

Tax-Sheltered Annuity Plan

23
Q

403b are like 401k but for…

A

Non-profits; common at schools and hospitals

24
Q

Keogh Plan was originally for…

A

Self-employed

25
Keogh plans are funded largely by...
Self-employed person's business, rather than the individual
26
Keogh plans are also known as...
HR-10 Plan
27
Other employees must be eligible to participate in Keogh plans if...
They're 21, work at least 1000 hours and have been there for a year
28
Traditional IRA's were originally for...
Employees who did not have retirement plans at work
29
Traditional IRA's can now be created for...
Nearly everyone with earned income
30
Unlike a 401k, traditional IRA's are generally under investment control of...
The individual
31
Employees who also have a qualified plan at work can have an IRA but...
Might have a limit on deductible contributions
32
ROTH IRA's are funded with money that's...
Already been taxed
33
ROTH IRA's have no taxes on withdrawals if done...
After 59.5 and account is at least 5 years old
34
ROTH IRA's have no required withdrawals at...
73
35
SIMPLE Plans
Low-cost plans for businesses with less than 100 employees
36
SIMPLE plans include...
Matching and immediate vesting
37
Transfer
Moving money from one plan to the same type of plan
38
Transfers are generally not taxed because...
Money isn't distributed to the taxpayer
39
Rollover
Moving money from different types of plans
40
Rollovers involve receipt of money by taxpayer and must be deposited into another qualified account within...
60 days to avoid taxes