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24 Cards in this Set
- Front
- Back
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Social Security Statement |
Lists the year-by-year Social Security Earnings you've been credited with and shows expected retirement income.
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Basic Retirement Plan |
Employees participate after a certain period of employment |
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Widows Gap |
The period during which the survivor's benefits are not paid. Either until dependent is 16 or spouse is 60. |
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Full Retirement Age |
67, but before 1960 is 65 and 67 |
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Pension Plan |
Allows a deduction for tax purposes into retirement programs. Employees may also deduct these contributions from taxable income. |
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Supplemental plans |
Enable employees to increase the amount of funds being set aside for retirement. Voluntary |
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Participation requirements |
Certain criteria such as years of service, minimum age, level of earnings , and employment classification that determine eligibility for most pension plans. |
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Noncontributory pension plan |
The employer pays the total cost of the benefits. |
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Vested rights |
Certain Criteria that must be met before the employee can obtain a non forfeitable right to a pension. |
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Cliff Vesting |
No full vesting to the pension until 3 years of service |
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Graded Vesting |
Gradually starting with after 2 years receiving 20% of benefits and an increase of 20% until reaching 100% after 6 years. |
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Salary Reduction Plan (401K Plan) |
Most popular supplemental retirement program. Divert portion of salary to a company-sponsored, tax sheltered savings account. Tax paid once account starts to draw down. (403b) |
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Individual Retirement Arrangements (IRA) |
Retirement plan which a person may contribute a specific amount each year.
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Typres of IRA |
-Nondeductible IRA -Roth IRA -Traditional IRA- |
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Traditional IRA |
-Open and funded without any employer present -Immediate Tax Benefits -Funds Always available -flexible with contributions |
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Nondeductible IRA |
-Grows Tax-deffered with earnings sheltered from taxation until withdrawn. -already taxed, will not be again. |
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Roth IRA |
ability to invest after tax-dollars, grow tax deffered and withdraw tax deffered. |
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Coverdell Education Savings Accounts |
Set up to cover college costs of a child or grandchild. Plan allows after tax of $2,000 over year until 18. |
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Self-Directed Accounts |
Allowance to make and determine your own investment strategy base on comfort level and risk. |
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Simplified Employee Pension PLan |
Allows Self-employed individuals to set up tax deferred retirement plans for themselves and their employees. |
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Annuity |
Investment created by life insurance companies that provides a series of payments over time. Systematic liquidation of an estate to provide protection. |
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Accumulation / Distribution Period |
Period during which premiums are paid for the purchase of an annuity/ period during which annuity payments are made to an annuitant. |
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Classification of Annuities |
Single Premium annuity contract: purchased with a lump-sum payment. -Immediate Annuity: Annuitant begins receiving monthly benefits immediately Installment premium annuity contract- a contract purchased through periodic payments overtime -Deferred annuity- an annuity in which benefit payments are deferred for a certain period of years.
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Annuitize |
Systematically parceling out the money into regular payments over a defined or open-ended period |
