Retirement Plans

Question 1

An example of a tax qualified retirement plan would be

Answer 1

Defined contribution plan

Question 2

How are contributions made to a Roth IRA handled for tax purposes?

Answer 2

Withdrawals are designed to be tax free so long as distributions are qualified

Question 3

Roth IRA contributions are

Answer 3

Not tax deductible

Question 4

Company contributions to employee individual annuities are considered

Answer 4

Qualified retirement annuities such as 401k

Question 5

Traditional IRA roll overs must be done within… to avoid tax consequences

Answer 5

60 days assuming possession of distribution isn’t made by employee

Question 6

Which is NOT a federal requirement of a qualified plan? Must benefit a broad cross-section of employees, employee must be able to make unlimited contributions, vesting schedule must be defined,employer established his plan.

Answer 6

Employee must be able to make a limited contributions

Question 7

In order to make tax for withdrawals from a Roth IRA and owner must be

Answer 7

At least 59 1/2 years old and have owned the account for a minimum of five years

Question 8

Which of the following would disqualify a company’s retirement plan from receiving a favorable tax treatment contains a vesting schedule, contributions are applied with no regard to income, foreign for the sole benefit of employees and its beneficiaries, it is temp

Answer 8

It is temporary

Question 9

Deferred compensation option

Answer 9

Enables an employee to defer current receipt of income and have it paid at a later date when the employee should have a lower income tax bracket

Question 10

Traditional IRAs have

Answer 10

Earnings that are taxable when withdrawn

Question 11

Kieth plans are designed to provide pension benefits

Answer 11

Self-employed people

Question 12

Inherited traditional, IRAs caused the beneficiary to have to pay taxes on money withdrawn as

Answer 12

Income because an income tax has to be paid when money is withdrawn

Question 13

When a qualified plan starts making payments which portion of the distributions is taxable? Principal, contributions made by employee, contributions made by employer, gains

Answer 13

Gain

Question 14

Under a traditional IRA interest earned is taxed

Answer 14

Upon distribution

Question 15

Examples of employees covered under ERISA

Answer 15

Local electric company with 12 employees

Question 16

ERISA

Answer 16

The employee retirement income, security act of 1974

Question 17

ERISA

Answer 17

Enacted to provide minimum benefits, standards for pension and employee, benefit plans, including fiduciary, responsibility, reporting and disclosure practices, investing rules

Question 18

ERISA

Answer 18

Purpose is to protect the rights of workers covered under an employer sponsored plan

Question 19

Employer, sponsored plans

Answer 19

Define benefit plans pay a specified benefit amount upon employees retirement after term pension is used then benefit is based on employees length of service or earnings and deferred annuities mostly fund defined benefit plans

Question 20

Tax benefits of qualified plans

Answer 20

Employee contributions or tax deductible and not treated as taxable income to the employee. Employee contributions are made with pretax dollars and interest on both employee and employee contributions is tax deferred employees only paid taxes on amounts at the time of withdrawal.