exam 3 Flashcards
retirement - what kind of institutions would be interested?
Banks
Mutual Funds
Insurance Companies
Wirehouses
Brokerage Firms
what kind of savings issues are there?
Savings Amount
Savings Rate
Timing of Savings
what kind of investment issues are there?
Savings Amount
Savings Rate
Timing of Savings
how much of your paycheck should you save?
at least 10%
What is an IRA, and what are the types of IRA?
IRA - Individual Retirement Account: for each IRA, there is a limit on how much you can put into it, you can open them at Banks
Traditional IRA
Roth IRA
Rollover IRA
Roth IRA
there isn’t a deduction, tradeoff is paying no taxes, when you take the money out, best to get a roth IRA, or 401K, best option is Roth IRA
Roth 401 K
peak earning years - higher tax bracket
*retirement - lowering tax bracket
*can up to 11,000, that is the limit to put into IRA
Traditional 401 K
retirement vehicles, where companies you work for set this up, so you can contribute to it. It is tax-deferred. A plan offered through your employer/company.
*can put up more than 11,000 for 401K
*Up to 23,000 for 401K]
*there is a catch up provision, for up to 50,000?
rollover IRA
401K to 401K transfer, happens without you
If you don’t transfer the money to your new company, between the transition it will become taxable money within 60 days
You can leave it in old company, or rolling over your 401K into IRA
If you change jobs frequently, you want to take control of your assets
Don’t forget about 401k accounts!
pension?
?
what is the main advantage of a traditional 401k?
tax deferred growth, not being taxed upfront so it will be deferred until the future. It is a portfolio of investments, offers diversification and tax deferred growth, which will be tax deferred as long as you keep investing money while you’re working for your employer. You can be penalized for taking out money early.
rollover 401k
for transferring between companies, main advantage: control of your investments.
401 k -
can contribute to it, but it isn’t unlimited, there is a limit of 23,000 dollars put into the account, employers can match your amount. It is free money the company is giving you, just for participating in the plan.
what is RMD?
For traditional 401k, at some point the government can ask for you to pay taxes, starting at 73.
IRA = you can buy stocks, bonds, mutual funds, has to be traditional investments (CDs included too)
$7,000 ?
Social Security = can be taken as early as 62
Roth 401K
a different type of 401K, is is TAX FREE, it is a newer version of 401 K, will never have to pay taxes in the future. A lower tax bracket. The power of compounding and it won’t be taxed is an advantage. If withdrawals are before the age of 59 ½. It can trigger a 10% penalty
Employer matching for 401K, can vary between companies
*If just starting out in employment, it is more recommended to choose ROTH,
What are the different types of Medicare?
Diff Types of Medicare - eligible for medicare at 65
Medicare Type A = pays for hospitalizations
Medicare Type B = pays for physicians visit
Medicare Type C = voluntary insurance plan that pays for things Medicare doesn’t pay for (optional/supplementary)
Medicare Type D = pays for prescription drugs
Only Need Part A + B for Medicare, the rest is optional
What is a single payer system?
Single Payer System = a healthcare system that is subsidized by the government, no insurance, exists in Canada and UK. Only 1 payer.
What is the difference between Medicare and Medicaid?
Medicare = federal government program
Medicaid = is a needs based plan, a minimum threshold for qualification, is partnership with federal government and state government, each one pays into it.
What is the ACA?
Affordable Care Act or ‘’Obamacare’’ requires large employers, which is an employer that at any time during the year, employs at least 50 people, to provide a minimum level of health insurance coverage to employees or face stiff tax penalties.
What is the biggest benefit of Obamacare?
Not denying them coverage for preexisting conditions
What are the different types of ACA plans?
Bronze Plan - 60%
Silver Plan - 70%
Gold Plan - 80%
Platinum Plan - 90%
what is the benefits of health insurance?
Bigger pool of people, more predictability, more affordability
what are the different types of group and individual health insurance plans?
1). Health maintenance organization (HMO) - hospital you go to might be affiliated with the HMO, so hospital and insurance all rolled into one, designed for more affordability
2). Preferred Provider Organization (PPO) - can go to other doctors that are a part of the HMO.
3). Point of Service Plans (POS) - paid for service?
Indemnity - reimbursement for service, paid for service
What is the COBRA Act and what does it do?
COBRA ACT - Consolidated Omnibus Budget Reconciliation Act of 1985 and ?????????
