What provides a detailed description of the group plan that is given to the employer?
Master contract
true or false: a profit sharing plan requires annual contributions regardless of the company profitability.
false
is there an income threshold for 529 college savings plan contributors?
No. There is no income limits imposed for these plans.
What type of group plan requires the employee to pay all or part of the insurance premium
a contributory group plan
if John turned 70 � in December, when must he begin IRA required minimum distributions
by April 1st of the upcoming year
who is eligible to make tax deductible contributions to an IRA?
A person not covered by an employer plan, or, if covered, a person who meets the income restriction
true or false: SEPs require employees to become immediately vested in the full amount contributed
true
what are some of the acceptable investments for IRA contributions?
Stocks, bonds, mutual funds, and CDs
list some of the benefits provided by Social Security
Medicare, retirement, survivors, disability, dependent benefits and a life insurance death benefit
Hank, age 71, has a Roth IRA period what penalty is assessed for his failure to begin distributions?
There is no penalty since Roth IRA's do not have a required minimum distribution.
For employers offered SEP plans, where are contributions made on behalf of their employees directed?
In the employees individual SEP IRA
for what reason may individuals take an early withdrawal without penalty?
Reaching age 59 �+ death, disability, qualified higher education expenses, or first time homebuyer ($10,000 limit )
prior to age 59 �, penalty free withdrawals from an IRA may be taken for ________ expenses.
Prior to age 59 �, penalty free withdrawals from an IRA may be taken for qualified educational expenses.
A rollover or qualified plan money from one account to another must be completed within ___days of withdrawal.
a rollover of qualified plan money from one account to another must be completed within 60 days of withdrawal
the maximum contribution to an IRA is the lesser of $_____ or _____% of earned income.
The maximum contribution to an IRA is the lesser of $6000 or 100% of earned income.
When Maya person began taking penalty free withdrawals from her 401K?
As early as age 59 �
true or false: defined premium programs determine retirement benefits using income average and years of service
true
may an aunt set up a 529 plan for her nieces
yes. The donor of a 529 plan is not required to be a parent
how are withdrawals from Roth IRA's treated for tax purposes
withdrawals are tax free if the account is open for at least five years and is not considered an early withdrawal
how much may be contributed to a coverdell each year?
An after tax contribution of $2000 is allowed per year
An employee pays __% of his wages to Social Security.
YouTube an employee pays 7.65% of his wages to Social Security.
Who bears the investment risk in a defined benefit plan?
The employer
contributions to a Keogh plan art solely based on _____ income.
Contributions to a Keogh plan are solely based on self employment income.
Employer contributions into an employee qualified plan are _____ to the employer.
Employer contributions to an employee qualified plan are tax deductible to the employer
in general, a 401K plan is available to individuals who work for a _______ Corporation.
In general, a 401K plan is available to individuals who work for a for profit Corporation
Social Security contribution taxes are known as ____ taxes.
Social Security contribution taxes are known as FICA taxes
what percentage does an employer pay in a noncontributory group plan?
100%
true or false: the larger the database of statistics comma the more predictable loss ratios become.
True, according to the law of large numbers.
what is a coverdell education savings plan?
A savings plan that funds both elementary in higher education
What is another name for Social Security?
Old age, survivors, disability comma and health insurance program
true or false: Social Security benefits are based on the primary insurance amount (PIA) ad the insured's SS status
true
true or false: defined contribution plans focus on contribution amounts, but do not guarantee preset retirement amounts
true
anyone with ____ income may contribute to an IRA.
Anyone with earned income may contribute to an IRA
how much maybe contributed to a 529 plan in avoid gift tax?
a donor may give up to $15,000 a year and avoid the gift tax
________ our college savings plans with high contribution limits set by the state sponsor.
529 plans are college savings plans with high contribution limits set by the state sponsor.
For what reason may early redraws be taken without the 10% IRS penalty applying
death, disability, divorce, qualified financial hardship and qualified loans
what is another name for a 403b plan
a tax sheltered annuity
Define the term: persistency
the length of time a group insurer has provided coverage for a particular insured group
when must IRA withdrawals begin in order to avoid the late withdrawal penalty?
By April 1st of the year after an individual terms age 70 �.
how many quarters of contribution credit does a currently insured individual have under the Social Security system?
Currently insured is determined by an individual having made a FICA contribution in six of the last 13 quarters
how is a Roth IRA contribution different from a traditional IRA contribution?
Roth IRA contributions are always made after tax, while traditional IRA contributions are deductible.
If a married person dies, what can be done with her IRA assets?
These assets may be combined with those of her surviving spouse
true or false: qualified plans receive favorable tax treatment by the IRS.
True
A 401K plan uses ____ contributions and the growth of the account is _________.
a 401K plan uses pretax contributions and the growth of the account is tax deferred
what is the maximum annual IRA contribution for a 58 year old whose only income is investment income?
$0.00, since the individual has no earned income.
Qualified plan withdrawals prior to age 59 1/2 are taxable and also subject to a __% IRS early withdrawal penalty
qualified planned withdrawals prior to age 59 one half are taxable and also subject to 10% IRS early withdrawal penalty
what retirement plan is available to the self-employed individuals
there are two plans specifically available to self-employed --Keogh and a SEP IRA
What is waived for the first time home buyer in the event of an IRA distribution
The IRS penalty is waived however the withdrawal is subject to tax
how is Social Security funded?
By payroll taxes
An employer contributes ___% of an employee's wages to Social Security
an employee err contributes 7.65% of an employee's wages to Social Security
403 B contributions are pretax contributions made on a _______ reduction basis
4013b contributions are pretax contributions made on a salary reduction basis
Identify the acronym: SIMPLE
savings incentive match plans for employees
how are withdrawals from a traditional IRA treated for tax purposes
if all contributions were deductible, then the entire withdrawal is taxed as ordinary income.
A fully insured individual under the Social Security system has how many quarters of contribution credit?
Fully insured means a FICA contribution of at least 40 quarters
if an employer makes a keogh contribution on his own behalf, what must be done for his employees?
Employee contributions must be at the same percentage as made for the employer
for whom is a 457 deferred compensation program designed?
Those who work for a municipality (state employees )
for employers offering SEP plans, where are contributions made on behalf of their employees directed
and the employees individual SEP IRA
the lump sum death benefit of Social Security is $____ as of 2010
the lump sum death benefit of Social Security is $255 as of 2010
define vesting
the right an employee gradually acquires by length of service at a company to receive employer contributed benefits
what penalty is assessed on the withdrawal of funds for an unqualified expense from a 529 plan?
A 10% IRS penalty plus federal taxation
who bears the investment risk in a defined contribution plan
the employee
What is used to verify group participation and is given enrolled employees
a certificate of coverage
what is a bad risk or selection called
adverse selection
May individuals invest in an out of state 529 plan?
Yes. Individuals may choose to invest in an in-state or out-of-state 529 plan
True or false: SEPs require employees to become immediately vested in the full amount contributed.
True
what type of group plan requires the employee to pay all or part of the insurance premium
a contributary group plan
per Social Security, how many quarters of Social Security contributions are needed to be fully insured?
40 quarters of FICA contributions (not consecutive) or 10 years (according to Social Security)
what right does the "incident of ownership" provide to an employee?
And employees "incident of ownership" allows the employee the right to name or change a beneficiary designation
provide examples of individuals who would qualify to participate in a 403b plan
school and University employees , nurses, and individuals who work for other types of nonprofit organizations
How much may a married couple earning $325,000 contribute to a Roth IRA
$0.00, since the couples income exceeds the income threshold
for what type of individual is a 403B plan primarily designed for?
An individual who works for a nonprofit organization
in what form must IRA contributions be made
cash
who finds a 529 plan?
The donor
true or false: if 529 plan funds are not used for a child's education, they may be transferred to a relative's plan.
True
when may a person begin taking penalty free withdrawals from her 401K?
As early as age 59 �
are employer contributions to an employee qualified retirement account considered income to the employee?
No
what is a simplified employee pension (SEP) plan?
An employer sponsored IRA for the self employed and its employees
In Group life insurance, premiums paid for death benefits over $_______ are taxed as ordinary income to employees.
In Group life insurance, premiums pay for death benefits over $50,000 are taxed as ordinary income to employees
is a person permitted to contribute to her own 529 plan?
Yes
who owns the investments contained within a 547 plan?
The employer
a contribution of $_______ may be made to a spousal IRA for a nonworking spouse.
A contribution of $6000 may be made to a spousal IRA for a nonworking spouse
Who is eligible to make tax deductible contributions to an IRA
a person not covered by an employer plan, or, if covered, a person who meets the income restriction
identify the acronym: TSA
tax sheltered annuity (a qualified contract)