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Flashcards in Tax-Advantaged Accounts & Products Deck (96)
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1

Category of retirement plans with tax deductible contributions

Qualified

2

Retirement plan category that can make non-deductible employee contributions on a discriminatory basis

Non-qualified

3

Annual IRA catch-up contribution amount allowed for individuals 50 and over

$1,000

4

Age at which distributions from an IRA may begin without penalty

59 1/2

5

In a traditional IRA account, age at which distributions must begin to avoid penalties

70 1/2

6

Amount of IRA insufficient distribution penalty

50% of amount that should have been withdrawn

7

Amount of IRA early distribution penalty

10% of amount distributed (plus ordinary income tax)

8

Five events prior to age 59 1/2 that will not trigger an IRA early distribution penalty

Death; disability; 1st time home purchase; education expenses for taxpayer, spouse, child or grandchild; medical premiums for unemployed; and excess medical expenses

9

Two examples of ineligible IRA investments

Collectibles and life insurance

10

Tax status of contributions made to Roth IRAs

After tax

11

Tax status of distributions from Roth IRAs

Non-taxable

12

Federal tax status of contributions made to Section 529 plan

After-tax

13

Tax advantage available for 529 plan contributions in many states to state residents

Contributions to 529 plan sponsored by that state are tax deductible on state tax returns

14

Taxation that applies to a lump sum withdrawal from an IRA account at age 55

Ordinary income on earnings + 10% penalty

15

Retirement plan for self-employed persons, unincorporated businesses or professional practices

HR-10 plan (Keogh plan)

16

Penalty for excess contributions made to an IRA account

6%

17

Qualified plan available to employees of non-profit organizations

403(b)

18

Type of qualified plan that promises a specified benefit at retirement

Defined benefit

19

Type of defined contribution plan that allows employee pre-tax contributions which may be matched by employer contributions up to a certain percentage

401(k) plan

20

Federal regulation that specifies guidelines for private sector and certain union plans

Employee Retirement Income Security Act (ERISA)

21

Schedule that identifies employee entitlement to pension benefits, based on years of service

Vesting schedule

22

ERISA clause that specifies impartial treatment for eligible employees

Non-discrimination clause

23

ERISA-defined employee eligibility requirements for plan participation

21 years of age and one year of full time service

24

Tax treatment of withdrawals from Section 529 Plans

Tax free withdrawals (after-tax contributions)

25

Tax nature of contributions to Section 529 Plans

After tax contributions

26

Distributions from tax deferred annuities are

100% taxable

27

A retirement plan requiring the services of an actuary to determine annual contributions

Defined benefit plan

28

The penalty that applies if funds are withdrawn from an annuity before age 59 1/2.

10% penalty on earnings

29

Life insurance company contract designed to provide a stream of guaranteed income payments for life

Annuity

30

The insurance company account in which variable annuity payments are invested

Separate account