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SERIES 7 > Unit 11- Retirement Plans > Flashcards

Unit 11- Retirement Plans Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Are contributions tax deductible for QUALIFIED OR NONQUALIFIED PLANS?

A

QUALIFIED

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2
Q

IRS must approve QUALIFIED/NONQUALIFIED PLANS?

A

QUALIFIED

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3
Q

QUALIFIED/NONQUALIFIED plans may discriminate

A

NONQUALIFIED

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4
Q

Tax on accumulation is deferred for QUALIFIED/NONQUALIFIED?

A

BOTH

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5
Q

All withdrawals are taxed for QUALIFIED/NONQUALIFIED?

A

QUALIFIED

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6
Q

All excess over cost base is taxes for QUALIFIED/ NONQUALIFIED

A

NONQUALIFIED

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7
Q

QUALIFIED/NONQUALIFIED plans are a trust?

A

QUALIFIED

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8
Q

Deferred Compensation Plans are QUALIFIED/NONQUALIFIED

A

NONQUALIFIED

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9
Q

Payroll Deduction Plans are QUALIFIED/NONQUALIFIED?

A

NONQUALIFIED

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10
Q

Are board members eligible for Deferred Compensation Plans?

A

No

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11
Q

What is the difference between Payroll Deduction and 401(k) Plan?

A

401(k) plans are qualified and are pre-tax dollars

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12
Q

IRA Contribution limit for under 50? 50 and over?

A

$5,500 and $6,500

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13
Q

What is FDIC Insurance Amount on retirement accounts?

A

$250,000

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14
Q

Can you hold margin accounts or options strategies in your IRA?

A

No

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15
Q

Are annuities allowable as investments in IRAs?

A

Yes

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16
Q

Are life insurance contracts allowable as investments in IRAs?

A

No

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17
Q

Are munis allowable as investments in IRAs?

A

No

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18
Q

At what age is there no penalty for distributions?

A

59 1/2

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19
Q

At what age MUST distributions begin?

A

The year after the customer turns 70 1//2

20
Q

“RMD’

A

Required Minimum Distributions

21
Q

“RBD”

A

Required Beginning Date

22
Q

What is the penalty for distributions before 59 1/2?

A

10%

23
Q

What is the penalty if you have not taken distribution by the April 1st after the individual turns 70 1/2?

A

50% insufficient distribution penalty

24
Q

How many days must a rollover be completed in after withdrawal?

A

60 calendar days

25
Q

Difference between a rollover and a transfer

A

the Rollover- the individual takes possession of the funds, whereas
the Transfer, the funds move from one custodian to another custodian

26
Q

How many rollovers can occur in a year?

A

Only One

27
Q

How many transfers can occur during a year?

A

unlimited

28
Q

Roth IRAs

A

IRAs that allow after-tax contributions

29
Q

Are contributions to ROTH IRAs deductible?

A

NO

30
Q

Is there a required minimum distribution at age 70 1/2?

A

No

31
Q

Re-characterization of a contribution

A

When a traditional IRA has been converted in to a ROTH IRA and the participant wishes to go back to the traditional IRA instead

32
Q

Can you convert and reconvert and amount during the same tax year?

A

No

33
Q

Coverdell IRA

A

Education IRA

34
Q

Are Coverdell’s pretax or after tax?

A

after tax

35
Q

What is the max annual contribution to a Coverdell IRA

A

2,000 per student per year for children under 18

36
Q

Are Coverdell distributions taxed or tax free?

A

Tax Free

37
Q

Are contributions to 529 Plans pretax or aftertax?

A

after-tax

38
Q

Keogh Plans / HR-10 Plans

A

self-employed or owner-employees of unincorporated businesses

39
Q

Are Keogh Plans/HR-10 Plans qualified or nonqualified?

A

qualified

40
Q

Employees of self-employed are eligible for Keogh contributions if they meet 3 requirements

A
  • works a least 1,000 hours in the year
  • completed one or more years of continuous employment
  • are at least 21 years of age
41
Q

Can IRAs or Keoghs hold cash-value life insurance contracts?

A

Keoghs

42
Q

What is the penalty for excess contributions to an IRA?

A

6%

43
Q

What is the penalty for excess contributions to a Keogh?

A

10%

44
Q

How are Keogh distributions taxed?

A

taxed as ordinary income

45
Q

How are ROTH 401 (k)s different from ROTH IRAs (2 reasons)

A

1) no income limitations on who may have such a plan

2) account owner MUST begin withdrawals by 70 1/2

46
Q

ERISA- Employee Retirement Income Security Act

A

PARTICIPATION: all employees over 21 who have performed more than one year of service must be provided option to participate

FUNDING: funds contributed to plan must be segregated from corporate assets

VESTING: entitled to their entire retirement benefit within a certain number of years even if leave the company

Communitication: Plan docs must be in writing, with annual statements of account

Nondiscrimination: impartially treat employees

Beneficiaries: must be names to receive an employee’s benefits at death

SERIES 7 (13 decks)

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