Life Insurance and Health Insurance Studyguide 2023

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Section 529 Plans - ANSWER - state provided - can be funded by after tax dollars - can pay prepaid tuition - All earnings exempt from federal taxes - If withdrawn for unqualified withdrawl, 10% pe... nalty Roth IRA - ANSWER private retirement plan that taxes income before it is saved, but which does not tax interest on that income when funds are used upon retirement Distributions don't have to start before 70.5 401(k) plan - ANSWER Elective deferral plan that allows employee to reduce compensation by a stated percentage on a tax deductible/ tax differed basis; often the employer matches the employee contributions Simplified Employee Pension (SEP) - ANSWER A qualified plan in which a smaller employer contributes specified amounts directly into IRA accounts on behalf of eligible employees 403(b) plan - ANSWER An elective deferral plan for employees of organizations such as school systems, churches, and hospitals Keogh Plan - ANSWER Retirement plan for self-employed individual and their qualified employees Rollover - ANSWER Tax free withdrawal of cash or other assets from one retirement program and its reinvestment in another program. It is not considered income and it is not taxable until a later withdrawal. Has to be completed in 60 days Transfer - ANSWER When amounts of a qualified plan are transferred to another qualified plan Employee Retirement Income Security Act (ERISA) - ANSWER Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the Pension Benefit Guarantee Corporation profit-sharing plan - ANSWER a benefit whereby employees may share in the profits of the business Catch-up Contributions - ANSWER -for those aged 50 or older -additional $1,000 annually **Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) - established the catch up provisions** Rollover time frame - ANSWER 60 days Keogh Plan - ANSWER A federally-approved, tax-deferred savings program for self-employed people, allowing them to set money aside for their retirement. Annuity Period - ANSWER the payout period of an annuity Flexible Premium Annuity - ANSWER allows the owner to vary the premium payments Deferred Annuity - ANSWER An annuity that starts sometime in the future. Variable Annuity - ANSWER Annuity that has a varying rate of return based on the mutual funds in which one has invested Gramm-Leach-Bliley Act - ANSWER requires financial institutions to ensure the security and confidentiality of customer data [Show More]

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