Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
36 Cards in this Set
- Front
- Back
|
what percent of people say they plan to work during retirement?
|
74%
|
|
|
what percent of people actually work during retirement?
|
23%
|
|
|
when does the average worker retire?
|
62
|
|
|
how much does retirement costs add to a company payroll?
|
30-40%
|
|
|
what is the estimated retirement asset total?
|
18.2 trillion
|
|
|
WLE?
|
work life expectancy
period of time a person is expected to be in work force generally 30-40 years |
|
|
RWLE
|
remaining work life expectancy
work period that remains at a given point in time before retirement |
|
|
RLE
|
retirement life expectancy
time period beg at retirement till death |
|
|
25-35 how much should a person save for retirement?
|
10-13%
|
|
|
35-45 how much sould a person save for retirement?
|
13-20%
|
|
|
45-55 how much sould a person save for retirement?
|
20-40%
|
|
|
increased needs during retirement?
|
health care
travel |
|
|
decreased needs during retirement?
|
mortgage eliminated
payroll/ SS taxes need to save work related expenses |
|
|
WRR
|
wage replacement ratio
estimate of the percentage of an individuals income earned prior to retirement needed during retirement |
|
|
top down approach?
|
start from 100% and subtract savings amount and payroll taxes
|
|
|
sources of retirement income?
|
SS
private and company retirement plans personal savings |
|
|
qualitative factors in retirement
|
Involuntary vs. Voluntary Retirement
Emotional and Psychological Factors Reloaction Decisions Travel |
|
|
monte carlo analysis?
|
mathematical tool used to illustrate the unpredictability of the real world and its effects on an individuals retirement plan
|
|
|
qualified plans?
|
must be established by the employer
|
|
|
ERISA enacted to protect retirement and pension benefits – basis for qualified plans today what year?
|
1974
|
|
|
eligibilty for a qualified plan?
|
age 21
1000 hours worked during one plan year |
|
|
what does it mean for a plan to be nondiscriminatory?
|
pass the 70% test,
look at ratios |
|
|
HC employee test?
|
more than 5% owner
or compensation of 115,000 |
|
|
50/40 test?
|
< 125 = 40% employees covered
> 125 = 50% employees covered |
|
|
vesting?
|
ownership inerest accrues to employee
|
|
|
key employee?
|
> 5% owner
> than one percent owner and 150,000 officer over 165,000 |
|
|
covered compensation limit?
|
250,000
|
|
|
defined benefit plans limit?
|
200,000
or 100% of 3 year salary at highest point |
|
|
defined contribution limit?
|
50,000
or 100% of one year salary |
|
|
standard allocation?
|
equal percentage to all employees
|
|
|
401K limits?
|
17,000
22,500 for 50 plus |
|
|
roth IRA limit?
|
5000 per year
6000 50 plus |
|
|
roth account limit?
|
17000
22500 50 plud |
|
|
legal promise of pension plan?
|
paying a pension at retirement
|
|
|
legal promise of profit sharing plan?
|
deferral of compensation and taxation
|
|
|
annual contribution limit for defined contribution?
|
25% of covered compensation
|
