retirement plans Flashcards
what are the two main types of retirement plans?
- qualified
- non-qualified
what are the main types of qualified plans?
- IRAs
- roth IRAs
- simplified employee pensions
- keogh (hr-10) plans
- tax sheltered annuities
- SIMPLEs
- 401Ks
irs approval is required for what kind of retirement plan?
qualified- irs approval required
non-qualified- irs approval not required
tax contributions are deductible on what kind of retirement plan?
qualified- tax contributions deductible
non-qualified- not deductible
describe discrimination on qualified and non-qualified retirement plans.
qualified- plan cannot discriminate
non-qualified- plan can discriminate
describe taxes on withdrawals from qualified retirement plans.
all withdrawals are taxed
describe taxes on withdrawals from non-qualified retirement plans.
only the excess over cost basis is taxed at time of withdrawal.
describe trustees on qualified and non-qualified retirement plans
qualified- plan is setup with trustee
non-qualified- no plan trustee is required
what is the allowable investment into an IRA per year?
$5,000
$6,500 if over 50 (catchup provision)
describe allowable maximum in an IRA for working spouse and non-working spouse
2 accounts with $5,500 max each
earning in an IRA grow..
tax deferred
penalty on premature withdrawals in an IRA
10% penalty before age 59 1/2
penalty on insufficient distribution in an IRA
50% penalty after age 70 1/2
describe transfers from trustee to trustee of an IRA account
60 day min - no tax
describe transfers from trustee to owner to trustee of an IRA account
60 day min - taxed