Section 10 - Retirement Plans Flashcards
Which of these statements concerning traditional IRAs is correct?
A. Earnings are not taxable when withdrawn.
B. Earnings are taxable when withdrawn
C. Contributions are never tax-deductible
D. Contributions are always made by the employer
Earnings are taxable when withdrawn
Under a traditional IRA interest earned is taxed.
A. Only if withdrawn prior to age 59 1/2
B. According to the capital gains rate
C. Upon distribution
D. During the accumulation phase
Upon distribution
Which of these retirement plans do NOT qualify for a federal income tax deduction?
A. Simple plan
B. Traditional IRA
C. Keogh plan
D. Roth IRA.
Roth IRA
Who were KEOGH plans designed to provide pension benefits for?
A. Corporate officers
B. Public school employees
C. The self-employed
D. Government employees.
The self-employed
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?
A. Qualified retirement annuity
B. Key employee retirement annuity
C. Executive compensation plan
D. Keogh annuity plan
Qualified retirement annuity
Which of the following employers is required to follow ERIS regulations?
A. A local government with 150 employees
B. A Church with 30 employees
C. A local electrical supply company with 12 employees
D. A Canadian company with 300 employees working in the United States
A local electrical supply company with 12 employees
Mike has inherited his father’s traditional IRA. As a beneficiary, he will pay _____ taxes on any money withdrawn.
A. Estate
B. Probate
C. No
D. Income
Income
Within how many days must a rollover be completed in order to avoid being taxed as current income?
A. 30
B. 60
C. 90
D. 120
60
Which of the following is NOT a federal requirement of a qualified plan?
A. Must benefit a broad cross-section of employees
B. Employees must be able to make unlimited contributions
C. Vesting schedule must be defined
D. Employer establishes the plan.
Employee must be able to make unlimited contributions
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?
A. Key person IRA
B. Period certain annuity
C. Deferred compensation option
D. Income deferral option.
Deferred compensation option
How are contributions made to a Roth IRA handled for tax purposes?
A Fully tax-deductible
B. Not tax deductible
C. Partially tax-deductible
D. Conditionally tax deductible
Not tax deductible
When a qualified plan starts making payments to its recipient, which portion of the distributions is taxable?
A. Principal
B. Contributions made by employee
C. Contributions made by employer
D. Gains
Gaines
A Roth IRA owner must be at least what age in order to make tax free withdrawals?
A. 59 1/2 and owned account for a minimum of 10 years
B. 59 1/2 and owned account for a minimum of 5 years
C. 70 1/2 and owned account for a minimum of 10 years
D. 70 1/2 and owned account for a minimum of 5 years
59 1/2 in an account for a minimum of five years
An example of a tax-qualified retirement plan would be a(n)
A. Equity compensation plan
B. Defined contribution plan
C. Executive index plan
D. 1035 exchange plan.
Defined contribution plan
Which of the following would disqualify a companies retirement plan from receiving favorable tax treatment?
A. Contains a vesting schedule
B. Contributions are applied with no regard to income
C. Formed for the sole benefit of employees and their beneficiaries
D. It is temporary
It is temporary
