Term
| 401k contributions are made in pretax or after tax dollars |
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Definition
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Term
| How does 401k vesting work |
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Definition
employee contributions are vested immediately
employer contributions (if any) are vested according to a vesting schedule |
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Term
maximum annual tax deferred contribution to a 401k plan.
catch up provision for age 50 and older |
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Definition
17,500.
catchup: extra 5500 annually |
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Term
| what type of employees can have 403b plans |
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Definition
| nonprofits (churches, public school employees) |
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Term
457 plans are defined _______ plans established for _______ and _______ employees.
Penalty for early withdrawal before 59.5? |
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Definition
457 plans are defined contribution plans established for government and nonprofit employees.
No early withdrawal penalty |
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Term
| cost basis of 401k, 403b, and 457 |
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Definition
| zero cost basis. contributions are pretax, distributions are taxed like ordinary income |
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Term
| Maximum Keogh contribution (% of income up to) |
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Definition
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Term
| Keogh plan early withdrawal penalty? |
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Definition
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Term
| Keogh distribution must start |
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Definition
| april of the year following 70.5, OR year of retirment |
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Term
| Qualified Retirement plans (4) |
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Definition
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Term
Maximum IRA contribution?
Catch up for 50+? |
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Definition
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Term
| IRA rollovers must be done within ___ days and can occur once every ____ |
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Definition
| IRA rollovers must be done within 60 days and can occur once every year |
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Term
| IRA early withdrawal penalty |
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Definition
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Term
| Do IRAs/Roth IRAs have Required Minimum Distributions |
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Definition
| IRAs do, but Roth's don't |
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Term
| IRA contributions are in ___tax dollars. Roth IRA contributions are in ____tax dollars. |
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Definition
| IRA contributions are in pretax dollars. Roth IRA contributions are in aftertax dollars. |
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Term
| Who's eligible to contribute to a Roth IRA? |
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Definition
| Gross income is less than 114k |
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Term
| SEP-IRA contributions... where does the money come from and what are the limits |
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Definition
Employers contribute. Employees can't.
up to 52k |
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Term
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Definition
| A qualified retirement plan where small business owners contribute up to 12k for employees. |
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Term
Retirement Plan: Profit Sharing
Qualified?
Tax-Deferred?
Contribution Limits: |
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Definition
Retirement Plan:Profit Sharing
Qualified? Yes
Tax-Deferred? Yes
Contribution Limits: 25% of salary |
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Term
Retirement Plan: 401k
Qualified?
Tax-Deferred?
Contribution Limits: |
|
Definition
Retirement Plan: 401k
Qualified? Yes
Tax-Deferred? Yes
Contribution Limits: 100% up to 17.5k |
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Term
Retirement Plan: 403b/457
Qualified?
Tax-Deferred?
Contribution Limits: |
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Definition
Retirement Plan: 403b/457
Qualified? Yes
Tax-Deferred? Yes
Contribution Limits: 100% up to 17.5k |
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Term
Retirement Plan: Keogh (HR10)
Qualified?
Tax-Deferred?
Contribution Limits: |
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Definition
Retirement Plan: Keogh (HR10)
Qualified? Yes
Tax-Deferred? Yes
Contribution Limits: 20% up to 52k |
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Term
Retirement Plan: Deferred Compensation
Qualified?
Tax-Deferred?
Contribution Limits: |
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Definition
Retirement Plan: Deferred Compensation
Qualified? No
Tax-Deferred? Yes
Contribution Limits: N/A |
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Term
Retirement Plan: IRA
Qualified?
Tax-Deferred?
Contribution Limits: |
|
Definition
Retirement Plan: IRA
Qualified? No
Tax-Deferred? Yes
Contribution Limits: 5500 plus nonworking spouse |
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|
Term
Retirement Plan: Roth IRA
Qualified?
Tax-Deferred?
Contribution Limits: |
|
Definition
Retirement Plan: Roth IRA
Qualified? No
Tax-Deferred? Probably tax free
Contribution Limits: 5500 plus nonworking spouse |
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|
Term
Retirement Plan: SEP
Qualified?
Tax-Deferred?
Contribution Limits: |
|
Definition
Retirement Plan: SEP
Qualified? No
Tax-Deferred? Yes
Contribution Limits: 25% up to 52k |
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Term
| Coverdell and 529: which one is for college, which one is for general education |
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Definition
| 529s are for college, coverdells are for any education |
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Term
| Tax Free gift limit in a single year |
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Definition
|
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Term
| Coverdell ESA maximum contribution and tax treatment |
|
Definition
| 2000 of post tax dollars. |
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Term
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Definition
| post tax. Depends on the state, but the general thing to keep in mind is gift tax (14000 annually or 70k up front treated like a 5 year contribution) |
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Term
| Health Savings Account (HSA) contributions are made in ___tax dollars |
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Definition
| Health Savings Account (HSA) contributions are made in pretax dollars |
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Term
| Penalty on HSA withdrawals not used for qualified medical expenses |
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Definition
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Term
| A 65 year old withdraws everything from a HSA account but not for qualified medical expenses. How is this penalized/taxed? |
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Definition
| once you're 65, the 20% penalty goes away, but the distribution is taxed like ordinary income because contributions were in pretax dollars |
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Term
| What two investments should an RR not recommend within a retirement plan? |
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Definition
| Annuities and Municipal Bonds |
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Term
| Under a defined benefit plan, benefits are based on: |
|
Definition
| a % of employees salary, accounting for age and years of service |
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Term
| Under a defined contribution plan, benefits are based on: |
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Definition
| The amount contributed plus investment gains |
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Term
| Annuities are similar to ___ ____, except that annuities are designed to provide ______ ________ _______ for investors. |
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Definition
| Annuities are similar to mutual funds, except that annuities are designed to provide supplemental retirement income for investors. |
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Term
| Variable Annuities/Fixed Annuities are securities? |
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Definition
| Variable Annuities are securities. Fixed Annuities are not. |
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Term
| Variable Annuities need to be delivered with _______ |
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Definition
|
|
Term
| What's the AIR in a variable annuity? |
|
Definition
| The Assumed Interest Rate is a projection of the performance of the securities in the separate account over the life of the contract. |
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Term
| Contributions to variable annuities are made in _____tax dollars. |
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Definition
| Contributions to variable annuities are made in aftertax dollars. |
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Term
| Distributions from variable annuities are taxed how? |
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Definition
Amount of contributions isn't taxed because it's an aftertax contribution.
Amount in excess of that is taxed like ordinary income. |
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Term
| If an annuitant dies during the pay in phase of an annuity, the beneficiary receives: |
|
Definition
|
|
Term
| Single Payment Deferred Annuity |
|
Definition
| Purchase is a lump sum payment. Payouts are delayed until a predetermined date. |
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Term
| Period Payment Deferred Annuity |
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Definition
| Purchase is through periodic payments, usually monthly. Payouts are delayed until a predetermined date. This is the most common type. |
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Term
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Definition
| Purchase is a lump sum payment. Payouts begin in a couple months. |
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Term
Life Annuity
Risk?
Payouts? |
|
Definition
Payment for life, then it stops.
Riskiest
Highest Payouts |
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Term
| Life Annuity with Period Certain |
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Definition
Guaranteed payouts for a period, even if the annuitant dies
Medium Risk
Medium Payouts |
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|
Term
| Joint Life with Last Survivor |
|
Definition
Payments guaranteed over the lives of the annuitant and beneficiary
Lowest Risk
Lowest Payouts |
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|
Term
| Annuity Early Withdrawal Penalty |
|
Definition
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