[SVL] Insurance 11

All of the following individuals meet eligibility requirements for setting up an IRA EXCEPT
A. Jan is 55 and works full time at a restaurant earning wages in tips
B. Michelle works 10 hours a week at a book store and is paid hourly
C. Sal is 21 and just started a full time commissioned position as a sales representative
D. Mitch is unemployed but does receive rental income of $2,000 a month

Which of the following products cannot be used to fund an IRA?
A. Flexible premium annuities
B. Bank accounts
C. Mutual funds
D. Life insurance

Which of the following early withdrawals from an IRA would be subject to a 10% penalty?
A. $10,000 down payment of a first home
B. Payment of health insurance premiums while unemployed
C. Premature withdrawal at age 55 in order to pay off a credit card
D. Payment of higher education expenses

Which of the following requirements of all employer-sponsored qualified retirement plans states that plans must benefit all regular employees, not just a select few?
A. Participation
B. Vesting
C. Fiduciary duty
D. Non-discrimination

Which of the following employee sponsored retirement plans does not require the employer to make a funding contribution every year?
A. Profit-sharing plans
B. Defined contribution plans
C. Pension plans
D. Defined benefit plans

Curtis knows that when he retires after age 65, he will receive 80% of his salary as a pension. This is an example of
A. a defined-benefit plan
B. a profit-sharing plan
C. a money purchase plan
D. a defined-contribution plan

All of the following statements about profit-sharing plans are correct EXCEPT
A. plan contributions are dependent on the company making a profit.
B. the maximum amount that an employer may contribute is limited to 25% of the company's payroll for all employees.
C. employers are not required to make a funding contribution every year.
D. the amount of annual contributions is set by employee.

At what age can people begin making catchup contributions to their individual retirement plans?
A. 60
B. 50
C. 55
D. 65

Premature distribution from a qualified plan or an IRA can result in the amount being taxed as income plus a penalty tax of
A. 25%
B. 15%
C. 5%
D. 10%

A rollover from one IRA to another or from a qualified plan to an IRA must be accomplished within how many days if the owner is to avoid an income tax liability on the amount rolled over?
A. 90
B. 10
C. 60
D. 30

At what age is an individual no longer subject to early withdrawal penalties under an IRA?
A. 55
B. 55½
C. 59½
D. 59

Which of the following organizations would be eligible to offer a 403(b) arrangement?
A. Public school system
B. Any small business
C. Any corporation
D. Police department

Carmen owns a business with 200 employees that provides a retirement plan whereby the business makes contributions on the employee's behalf. Carmen's plan is most likely
A. a Keogh plan
B. an SEP
C. a 403(b) plan
D. a 401(k)

Delbert is self-employed and sets up a retirement plan for himself. Delbert most likely
sets up
A. a SIMPLE plan
B. a 403(b) plan
C. a Keogh plan
D. a 401(k) plan

Kim is required to take a $2,000 minimum annual distribution from her IRA. She fails to comply and only takes a $1,000 distribution.
Because of this failure, Kim will be subject to
A. a 25% penalty tax
B. a 50% penalty tax
C. a $500 fine
D. a 10% penalty tax