Series 7 Retirement Plans

Front 1

How often will the IRS allow a health service account to be funded via a IRA distribution without paying federal taxes or penalties on the distribution

Back 1

One time

Front 2

What is a SEP IRA

Back 2

Simplified Employee Pension IRAs are established for small business owners and their employees. The retirement account is usually set up at a bank or other financial institution .ER Contributions max 25% of EEs comp or 20% of net profits

Front 3

A payroll deduction plan is a retirement plan not subject to

Back 3

Any eligibility, vesting, or funding standards as required by ERISA.

Front 4

Can a deferred compensation plan be used as collateral for a bank loan

Back 4

No. Deferred compensation is a promise made by an employer to defer a certain amount of employees salary upon retirement. The employee has no rights to the money until retirement, death, or disability, and thus cannot use it as collateral

Front 5

Under ERISA, a retirement plan that would like to write uncovered calls may do so when

Back 5

Under no circumstances. ERISA prohibit retirement plan Steve from making investments that are excessively speculative

Front 6

What is a disadvantage of a section 529 plan for prepaid tuition

Back 6

Section 529 prepay to wish in plans are used to lock in higher education class at current tuition rates. Eligibility for the plan is state specific. However, you can use those money to pay for a portion of an in state private school or any out of state school. In these instances the amount available for use in tuition payments will be determined by the tuition that an in-state publicly funded college would charge

Front 7

What are restrictions on the beneficiaries under a section 529 plan

Back 7

There are few restrictions on who may be the first beneficiary. However if the beneficiary is redesignated, the new beneficiary must be a close family member of the first

Front 8

When a self employed individual makes the maximum contribution to his own Keogh, HR10, plan, how much must he contribute to any eligible employees plans

Back 8

The maximum 25% of earned income

Front 9

One of your customers, aged 45, estimated that his annual earnings will be below the Roth IRA contribution ceiling limit. To his pleasant surprise, he received a year-end bonus but unfortunately it puts his earnings over the Roth IRA limit for allowing contributions. What is the best suggestion to help your customers

Back 9

Recharacterize the contributions to a traditional IRA so that the rules for contributing to a Roth IRA will not have been broken. Taking the money out in the form of a withdrawal would not have allowed the amounts to be there for the required five years and the customer is not 59 1/2, therefore the withdrawal would be taxable

Front 10

What happens to tax benefits when a corporation has a nonqualified retirement plan

Back 10

Tax free contribution benefits are lost. Tax has been paid on all amounts the EEs and the ER contribute to the plan.

Front 11

What investments and investments practices are ineligible for retirement plan

Back 11

Collectibles, life insurance, short sales, speculative option strategies, margin account trading

Front 12

What are the two most common reasons why an individual might choose to recharacterized IRA contributions

Back 12

They exceeded the earnings limitations on contributing to a Roth IRA. Or a significant decrease in the value of the account since the original conversion and when recharacterized no taxes would be due on the money withdrawn

Front 13

What is a Coverdell education IRA

Back 13

Allows after tax cash contributions up to $2,000 per student per for children younger than 18. Must be depleted by age 30. No tax if used for college, secondary or elementary school. 10% penalty is used for something else

Front 14

How are Roth 401k plans different from Roth IRA

Back 14

Roth IRA NO RMDs ; income max for contributions; contribution limited to $5.5 plus catch up with no ER match;
Roth 401K= RMDs ; NO income max; contribution limited to $17.5 plus catchup, If ER provides match, match is pretax, while EE contributions are after tax.