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RETIREMENT PLANS EXAM REVIEW WITH CORRECT ANSWERS

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Post-tax dollar contributions are found in Correct Answer Roth IRA investments A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called ... a Correct Answer profit-sharing plan What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? Correct Answer 100 A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid Correct Answer mandatory income tax withholding on the transfer amount Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the Correct Answer marital deduction Which plan is intended to be used by a sole proprietor and the employees of that business? Correct Answer Keogh Plan All of the following statements about traditional individual retirement accounts are false EXCEPT Correct Answer 10% penalty is applied to withdrawals before age 59 1/2 All of the following statements about traditional individual retirement accounts are Correct Answer -10% penalty is applied to withdrawals after age 59 1/2 -Withdrawals are normally tax-free to the recipient -Contributions are not tax deductible Premature IRA distributions are assessed a penalty tax of Correct Answer 10% An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? Correct Answer $25,000 When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld? Correct Answer none Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? Correct Answer Ordinary income tax and a 10% tax penalty for early withdrawal Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made? Correct Answer The account can be rolled into the surviving spouse's IRA [Show More]

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