Flashcards in Chapter 9 Life Deck (7):
Which of these retirement plans can be started by an employee, even if another plan is in existence?
Individual Retirement Account (IRA)
Individual Retirement Account (IRA). An IRA may be established by an employee, regardless of any other retirement plan.
Which plan is intended to be used by a sole proprietor and the employees of that business?
Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?
59 1/2. Traditional Individual Retirement Account (IRA) withdrawals are normally subject to a tax penalty if they are made before the owner reaches age 59 1/2.
Premature IRA distributions are assessed a penalty tax of
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes. A plan sponsor must withhold 20% of the distribution in federal taxes on a rollover. Once the rollover takes place to a new custodian, the remainder of the distribution is made.