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Life, Accident and Health Insurance
Questions and Correct Answers/ Latest
Update / Already Graded
Qualified Plan
Ans: -approved by IRS for favorable tax treatment
- tax deffered growth
Qualified Plan Requirements
Ans: 1) Be in writing 2)provided for benefit of employee 3)
must satisfy age and serive standards 4) cannot be
discriminatory 5) contributions cannot exceed yearly maximus
6) must provide survivorship benefits 7) must meet miniumum
vesting standards 8) cannot be top heavy
Advantages of Qualified plans
Ans: - employer and employee contributions are tax
deductivble and accumulate tax deferred
- Withdrawls before 59.5 is a 10% penalty
- must begin miniumum distributions by age 70.5
Qualified Plan distributions
All rights reserved © 2025/ 2026 |
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Ans: - taxable upon withdrawl
- 10% penalty upon withdrawl before 59.6
- can take out w/o penalty if death, divorce, qualified financial
hardship, plan loan or qualified rollover, 1st time home buyer,
disability of owner
- if you take out the money early, its a 20% penalty
- must rollover w/in 60 days or its considered a premature
distribution
Penalty for Withdrawl of Qualified Plan
Ans: - a 10% penalry plus applicable state and federal taxes
IRA IIndividual Retirement Account)
Ans: - all individuals who have earned income
- possible tax deductions
- tax deferral of gains
- Can contribute up to 5,000
- can add 1,000 "catch up" if over 50
Education IRA
Ans: - method to provide funding
All rights reserved © 2025/ 2026 |
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- Can be transferred to another IRA at 30
Section 529 Plans
Ans: - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA
Ans: - Allows owner to make non tax deductible contributions
- to get withdrawls tax free, the account must be in exist ence
for 5 years
- can add money tax free up to 5k
- distributions are tax free
- account is only allowed for people who's income does not
exceed a certain amount
SEP IRA (simplified Employee Pension Plan)
Ans: - employer sponsored IRA for small employers
- contrinutions deductible to employer
All rights reserved © 2025/ 2026 |
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- Employee must have worked for 3 of last 5 years
- contributions by employer cant exceed 49k or 25% of income,
whichever is lesser
- contributions for employees cant exceed 16,500
Keogh Plan
Ans: - self employed and employees
- replaced by SEPs
401k Plan
Ans: - allows employees to save for retirement tax free
- money is taken out pre-tax, and can be matched (and
deductible to employwer)
- Withdrawl penalty of 10% prior to age 59.5
- Miniumum distributions by age 70.5
- 2011 max was 16,500
403(b)/tax-sheltered Annuity
Ans: - availbale for employees of nonprofits, schools
universities, churches & hospitals
- just like 401k plans
All rights reserved © 2025/ 2026 |
Life, Accident and Health Insurance
Questions and Correct Answers/ Latest
Update / Already Graded
Qualified Plan
Ans: -approved by IRS for favorable tax treatment
- tax deffered growth
Qualified Plan Requirements
Ans: 1) Be in writing 2)provided for benefit of employee 3)
must satisfy age and serive standards 4) cannot be
discriminatory 5) contributions cannot exceed yearly maximus
6) must provide survivorship benefits 7) must meet miniumum
vesting standards 8) cannot be top heavy
Advantages of Qualified plans
Ans: - employer and employee contributions are tax
deductivble and accumulate tax deferred
- Withdrawls before 59.5 is a 10% penalty
- must begin miniumum distributions by age 70.5
Qualified Plan distributions
All rights reserved © 2025/ 2026 |
, Page |2
Ans: - taxable upon withdrawl
- 10% penalty upon withdrawl before 59.6
- can take out w/o penalty if death, divorce, qualified financial
hardship, plan loan or qualified rollover, 1st time home buyer,
disability of owner
- if you take out the money early, its a 20% penalty
- must rollover w/in 60 days or its considered a premature
distribution
Penalty for Withdrawl of Qualified Plan
Ans: - a 10% penalry plus applicable state and federal taxes
IRA IIndividual Retirement Account)
Ans: - all individuals who have earned income
- possible tax deductions
- tax deferral of gains
- Can contribute up to 5,000
- can add 1,000 "catch up" if over 50
Education IRA
Ans: - method to provide funding
All rights reserved © 2025/ 2026 |
, Page |3
- Can be transferred to another IRA at 30
Section 529 Plans
Ans: - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA
Ans: - Allows owner to make non tax deductible contributions
- to get withdrawls tax free, the account must be in exist ence
for 5 years
- can add money tax free up to 5k
- distributions are tax free
- account is only allowed for people who's income does not
exceed a certain amount
SEP IRA (simplified Employee Pension Plan)
Ans: - employer sponsored IRA for small employers
- contrinutions deductible to employer
All rights reserved © 2025/ 2026 |
, Page |4
- Employee must have worked for 3 of last 5 years
- contributions by employer cant exceed 49k or 25% of income,
whichever is lesser
- contributions for employees cant exceed 16,500
Keogh Plan
Ans: - self employed and employees
- replaced by SEPs
401k Plan
Ans: - allows employees to save for retirement tax free
- money is taken out pre-tax, and can be matched (and
deductible to employwer)
- Withdrawl penalty of 10% prior to age 59.5
- Miniumum distributions by age 70.5
- 2011 max was 16,500
403(b)/tax-sheltered Annuity
Ans: - availbale for employees of nonprofits, schools
universities, churches & hospitals
- just like 401k plans
All rights reserved © 2025/ 2026 |
