retirement plans Flashcards

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1
Q

what are the two main types of retirement plans?

A
  • qualified

- non-qualified

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2
Q

what are the main types of qualified plans?

A
  • IRAs
  • roth IRAs
  • simplified employee pensions
  • keogh (hr-10) plans
  • tax sheltered annuities
  • SIMPLEs
  • 401Ks
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3
Q

irs approval is required for what kind of retirement plan?

A

qualified- irs approval required

non-qualified- irs approval not required

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4
Q

tax contributions are deductible on what kind of retirement plan?

A

qualified- tax contributions deductible

non-qualified- not deductible

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5
Q

describe discrimination on qualified and non-qualified retirement plans.

A

qualified- plan cannot discriminate

non-qualified- plan can discriminate

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6
Q

describe taxes on withdrawals from qualified retirement plans.

A

all withdrawals are taxed

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7
Q

describe taxes on withdrawals from non-qualified retirement plans.

A

only the excess over cost basis is taxed at time of withdrawal.

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8
Q

describe trustees on qualified and non-qualified retirement plans

A

qualified- plan is setup with trustee

non-qualified- no plan trustee is required

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9
Q

what is the allowable investment into an IRA per year?

A

$5,000

$6,500 if over 50 (catchup provision)

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10
Q

describe allowable maximum in an IRA for working spouse and non-working spouse

A

2 accounts with $5,500 max each

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11
Q

earning in an IRA grow..

A

tax deferred

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12
Q

penalty on premature withdrawals in an IRA

A

10% penalty before age 59 1/2

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13
Q

penalty on insufficient distribution in an IRA

A

50% penalty after age 70 1/2

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14
Q

describe transfers from trustee to trustee of an IRA account

A

60 day min - no tax

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15
Q

describe transfers from trustee to owner to trustee of an IRA account

A

60 day min - taxed

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16
Q

what are some investment restrictions on an IRA account?

A
  • no margin
  • no short sales
  • covered call options only
  • no antiques or insurance
  • no municipal bonds
17
Q

describe roth IRAs

A
  • contributions after-tax dollars

- tax free withdrawals

18
Q

describe withdrawals on an roth IRA

A
  • can withdraw tax free after funds have been in account for at least 5 years
  • 59 1/2 or older
19
Q

describe a TSA (403B) plan

A
  • plan for employees of public schools

- pretax dollars (taxed when received)

20
Q

describe a 501 (C)3 plan

A
  • plant for employees of private non profit organizations

- pretax dollars (taxed when received)

21
Q

describe a keogh (HR-10) plan

A

-for self employed people

22
Q

max contribution on a keogh (HR-10) plan

A

-lesser of 100% of earnings or $53,000

23
Q

describe a 401K plan

A
  • corporate plan for employees (benefits)
  • based on profits
  • tax on money when removed
  • employer matching
24
Q

ERISA acronym

A

Employment retirement investment securities account

25
Q

describe the eligibility for an ERISA plan

A
  • 21 years old
  • 1 year min of employment
  • full time (min 1,000 hrs per year)
26
Q

describe coverdell education savings account

A
  • education IRA
  • funded with after tax dollars
  • withdrawals tax free for education expenses
  • max contributions of $2,000/year
27
Q

describe a 529 plan

A

-savings account for college only
-withdrawals federally exempt
(taxed if student attends college out of state)