Question 1

Daniela retired at the age of 65. The current balance in her Roth IRA is $200,000.Daniela established the Roth IRA 10 years ago. Through a rollover and annualcontributions Daniela has contributed $80,000 to her account. If Daniela receives a$50,000 distribution from the Roth IRA, what amount of the distribution is taxable?

Accepted Answer

A)   $50,000.
B)   $20,000.
C)   $0.
D)   $30,000.E) A) and D)
F) A) and C)

Question 2

Which of the following statements regarding vesting in a defined benefit plan is correct?

Accepted Answer

A)   Under a graded vesting schedule, an employee's entire benefit vests all at the same time.
B)   When an employee's benefits vest, she is legally entitled to receive the vested benefits.
C)   When an employee's benefits vest, she is entitled to participate in the employer's defined benefit plan.
D)   Under a cliff vesting schedule, a portion of an employee's benefits vest each year.E) None of the above
F) All of the above

Question 3

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Accepted Answer

A) True 
 B)False

Question 4

Participating in an employer-sponsored nonqualified deferred compensation plan is potentially risky because employers are not required to fund nonqualified plans. If the employer is not able to pay the employee when the payment is due, the employee usually becomes an unsecured creditor of the employer.

Accepted Answer

A) True 
 B)False

Question 5

Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Accepted Answer

A) True 
 B)False

Question 6

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements regarding self-employed retirement accounts is true?

Accepted Answer

A)   A self-employed taxpayer who has hired employees may set up either a SEP IRA or an individual 401(k) .
B)   A self-employed taxpayer who has hired employees may not set up a SEP IRA.
C)   A self-employed taxpayer who has hired employees may not set up an individual 401(k) .
D)   All of the choices are false.E) A) and C)
F) B) and D)

Question 8

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Accepted Answer

A) True 
 B)False

Question 9

Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Accepted Answer

A)   Employers annually deduct the amount earned by employees under the plan.
B)   Employers may discriminate in terms of who they allow to participate in the plan.
C)   Employers are required to annually fund their deferred compensation obligations to employees.
D)   Employers are required to invest salary deferred by employees in investments specified by the employees.E) B) and D)
F) A) and B)

Question 11

Shauna received a $100,000 distribution from her 401(k)  account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Accepted Answer

A)   $0.
B)   $10,000.
C)   $35,000.
D)   $25,000.
E)   None of the choices are correct.F) A) and B)
G) A) and E)

Question 12

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Accepted Answer

A) True 
 B)False

Question 13

Riley participates in his employer's 401(k)  plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Accepted Answer

A)   April 1, 2018.
B)   December 31, 2017.
C)   April 1, 2017.
D)   December 31, 2018.E) A) and D)
F) None of the above

Question 14

Riley participates in his employer's 401(k)  plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

Accepted Answer

A)   by April 1, 2016.
B)   by April 1, 2019.
C)   by April 1, 2017.
D)   by April 1, 2018.E) All of the above
F) None of the above

Question 15

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Accepted Answer

1) After-tax accumul...

Exam 13: Retirement Savings and Deferred Compensation

Riley participates in his employer's 401(k) plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

Correct Answer
verified

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

Correct Answer
verified

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Correct Answer
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Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Correct Answer
verified

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Correct Answer
verified

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Correct Answer
verified
1) After-tax accumul...
View Answer

Which of the following statements regarding self-employed retirement accounts is true?

Correct Answer
verified

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Correct Answer
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Correct Answer
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Correct Answer
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Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Correct Answer
verified

Riley participates in his employer's 401(k) plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Correct Answer
verified

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Correct Answer
verified

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Correct Answer
verified

Which of the following statements regarding vesting in a defined benefit plan is correct?

Correct Answer
verified

Exam 13: Retirement Savings and Deferred Compensation

Riley participates in his employer's 401(k) plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

Correct AnswerverifiedShow Answer

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

Correct AnswerverifiedShow Answer

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Correct AnswerverifiedShow Answer

Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Correct AnswerverifiedShow Answer

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Correct AnswerverifiedShow Answer

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Correct Answerverified1) After-tax accumul...View AnswerShow Answer

Which of the following statements regarding self-employed retirement accounts is true?

Correct AnswerverifiedShow Answer

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Correct AnswerverifiedShow Answer

Riley participates in his employer's 401(k) plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Correct AnswerverifiedShow Answer

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Correct AnswerverifiedShow Answer

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Correct AnswerverifiedShow Answer

Which of the following statements regarding vesting in a defined benefit plan is correct?

Correct AnswerverifiedShow Answer

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1) After-tax accumul...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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