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Flashcards in retirement plans Deck (27):
1

what are the two main types of retirement plans?

-qualified
-non-qualified

2

what are the main types of qualified plans?

-IRAs
-roth IRAs
-simplified employee pensions
-keogh (hr-10) plans
-tax sheltered annuities
-SIMPLEs
-401Ks

3

irs approval is required for what kind of retirement plan?

qualified- irs approval required
non-qualified- irs approval not required

4

tax contributions are deductible on what kind of retirement plan?

qualified- tax contributions deductible
non-qualified- not deductible

5

describe discrimination on qualified and non-qualified retirement plans.

qualified- plan cannot discriminate
non-qualified- plan can discriminate

6

describe taxes on withdrawals from qualified retirement plans.

all withdrawals are taxed

7

describe taxes on withdrawals from non-qualified retirement plans.

only the excess over cost basis is taxed at time of withdrawal.

8

describe trustees on qualified and non-qualified retirement plans

qualified- plan is setup with trustee
non-qualified- no plan trustee is required

9

what is the allowable investment into an IRA per year?

$5,000
$6,500 if over 50 (catchup provision)

10

describe allowable maximum in an IRA for working spouse and non-working spouse

2 accounts with $5,500 max each

11

earning in an IRA grow..

tax deferred

12

penalty on premature withdrawals in an IRA

10% penalty before age 59 1/2

13

penalty on insufficient distribution in an IRA

50% penalty after age 70 1/2

14

describe transfers from trustee to trustee of an IRA account

60 day min - no tax

15

describe transfers from trustee to owner to trustee of an IRA account

60 day min - taxed

16

what are some investment restrictions on an IRA account?

-no margin
-no short sales
-covered call options only
-no antiques or insurance
-no municipal bonds

17

describe roth IRAs

-contributions after-tax dollars
-tax free withdrawals

18

describe withdrawals on an roth IRA

-can withdraw tax free after funds have been in account for at least 5 years
-59 1/2 or older

19

describe a TSA (403B) plan

-plan for employees of public schools
-pretax dollars (taxed when received)

20

describe a 501 (C)3 plan

-plant for employees of private non profit organizations
-pretax dollars (taxed when received)

21

describe a keogh (HR-10) plan

-for self employed people

22

max contribution on a keogh (HR-10) plan

-lesser of 100% of earnings or $53,000

23

describe a 401K plan

-corporate plan for employees (benefits)
-based on profits
-tax on money when removed
-employer matching

24

ERISA acronym

Employment retirement investment securities account

25

describe the eligibility for an ERISA plan

-21 years old
-1 year min of employment
-full time (min 1,000 hrs per year)

26

describe coverdell education savings account

-education IRA
-funded with after tax dollars
-withdrawals tax free for education expenses
-max contributions of $2,000/year

27

describe a 529 plan

-savings account for college only
-withdrawals federally exempt
(taxed if student attends college out of state)