Ch. 23 Simple IRA Flashcards Preview

Employee Benefit Final > Ch. 23 Simple IRA > Flashcards

Flashcards in Ch. 23 Simple IRA Deck (12):
1

Simple IRA

employer-sponsored plans in which employer and employee contributions are made to IRAs that are owned by employees

2

What did the simple IRA replace?

SAR-SEP

3

When is it indicated?

1. employer wants a simple and easy plan
2. unincorporated

4

How many employees must an employer have?

100 or fewer

5

How much does an employee have to earn to be counted?

$5,000

6

Simple IRA does not have a percentage limit, but rather a ____ limit

dollar

7

5 advantages

1. plan adoption by completing a form
2. portable benefits
3. employees 100% vested
4. benefit from positive investment
5. funding through salary deferrals

8

4 disadvantages

1. unlikely to provide an adequate retirement for employees who enter the plan at older age
2. annual contributions limited
3. employer cannot maintain another qualified plan
4. not eligible for 10 year averaging

9

What is the annual employee contribution limit?

$11,500 plus $2,500 if the employee is 50 years old or older

10

An employee and employer can make contributions to a simple IRA even if the employee is over the age of ___

70 1/2

11

an individual cannot make ______ contributions to their own traditional IRA after reaching age 70 1/2

after-tax

12

Distribution penalty increased to ____ during the first ____ years

25%; 2