FPQP Module 7 Questions with Correct Answers 100% Verified By Experts| Latest Update
Guaranteed Success
Types of qualified plans (4) Defined benefit plans
Cash balance plans
Profit sharing plans
401(k) plans
Other tax-advantaged plans (5) Traditional IRA
Roth IRA
403(b)
SIMPLE IRA
SEP IRA
Non qualified plans 457 plans
Common features of qualified plans Pretax contributions
Tax-deferred growth
Vesting
A type of pension plan that provides a fixed amount payment upon retirement. defined
benefit pension plan
A defined benefit plan that provides for specific annual employer contributions that accumulate
at a guaranteed investment return Cash Balance Plan
Who contributes to a defined benefit plan? Only employers
, A defined contribution plan whereby the company shares any profits with employees in the
form of contributions to a retirement account. Profit sharing plan
Eligibility for profit sharing plans Employees must meet age and service requirements
Limited to 25% of participants total compensation
A plan that allows an employee to defer salary to a tax-deferred profit sharing plan 401(k)
plan
Individual Retirement Account - A personal qualified retirement account through which eligible
individuals accumulate tax-deferred income up to a certain amount each year. Traditional
IRA
private retirement plan that taxes income before it is saved, but which does not tax interest on
that income when funds are used upon retirement Roth IRA
Phaseout amounts for both spouses being active in company retirement plans vs one spouse
only $129,000/$204,000
An individual is only eligible to contribute to a Roth IRA if their modified adjusted gross income
is below a certain threshold. Roth IRA Eligibility
Qualified Roth IRA Distributions •A 5 year holding period has been met
•The distribution is made after 59 1/2, death, disability, or 1st time purchase of home
3 possible categories of Roth IRA distributions 1. Return of contributions
2. Return of conversion amount
3. Return of earnings
Guaranteed Success
Types of qualified plans (4) Defined benefit plans
Cash balance plans
Profit sharing plans
401(k) plans
Other tax-advantaged plans (5) Traditional IRA
Roth IRA
403(b)
SIMPLE IRA
SEP IRA
Non qualified plans 457 plans
Common features of qualified plans Pretax contributions
Tax-deferred growth
Vesting
A type of pension plan that provides a fixed amount payment upon retirement. defined
benefit pension plan
A defined benefit plan that provides for specific annual employer contributions that accumulate
at a guaranteed investment return Cash Balance Plan
Who contributes to a defined benefit plan? Only employers
, A defined contribution plan whereby the company shares any profits with employees in the
form of contributions to a retirement account. Profit sharing plan
Eligibility for profit sharing plans Employees must meet age and service requirements
Limited to 25% of participants total compensation
A plan that allows an employee to defer salary to a tax-deferred profit sharing plan 401(k)
plan
Individual Retirement Account - A personal qualified retirement account through which eligible
individuals accumulate tax-deferred income up to a certain amount each year. Traditional
IRA
private retirement plan that taxes income before it is saved, but which does not tax interest on
that income when funds are used upon retirement Roth IRA
Phaseout amounts for both spouses being active in company retirement plans vs one spouse
only $129,000/$204,000
An individual is only eligible to contribute to a Roth IRA if their modified adjusted gross income
is below a certain threshold. Roth IRA Eligibility
Qualified Roth IRA Distributions •A 5 year holding period has been met
•The distribution is made after 59 1/2, death, disability, or 1st time purchase of home
3 possible categories of Roth IRA distributions 1. Return of contributions
2. Return of conversion amount
3. Return of earnings
