Exam 17: Retirement and Estate Planning

A(n) ____ is intended for taxpayers with self-employment income and owners of small businesses.

Withdrawals of funds from a non-Roth tax-sheltered retirement plan prior to age 59 are always taxable income and are subject to a 10 percent penalty.

myRA is a type of Roth account that accepts after-tax contributions.

Roth IRAs have no required minimum distributions (RMDs).

Baxter is a office manager who works for Allied Company and is covered under its retirement plan.Baxter's AGI is $69,000,and he wants to contribute $2,000 to either an IRA or his employer's salary-reduction plan.Since he is in the 25 percent marginal tax bracket,he would save ____ in taxes by using the IRA and ____ by using the salary-reduction plan.

People who start saving and investing for retirement during their twenties should aim to reserve ____ percent of their pretax income every year.

You decide how to invest the money in a defined-contribution retirement plan.

Funds that are deposited to a deductible retirement plan and not taxed at that time are fully taxable when the money is withdrawn.

The best way to get an estimate of future Social Security benefits is to

Salvador (age 45) withdraws $50,000 from his tax-sheltered retirement plan to invest in a new business.Assuming Salvador is in the 28 percent marginal tax bracket and the contributions to the plan have not been taxed previously,how much will he pay in taxes and penalties?

The main purpose of using a tax-sheltered retirement account to invest for retirement is to

Cash-balance plans typically give older workers less in benefits.

The person named in a will who identifies assets,collects any money due,pays off debts,liquidates assets,files final income tax and estate tax returns,and with the court's permission distributes the balance of any remaining money and property to the beneficiaries is the

The Social Security status that requires at least 6 credits in the most recent three-year period is called ____ insured.

Suggestions and recommendations regarding funeral and burial instructions,organ donation wishes,material to be included in the obituary,contact information for relatives and friends,and other information useful to the survivors (such as the location of important documents) are best accomplished via a will.

An annuity purchased before retirement is typically a

A Keogh plan is applicable to people who are self-employed.

Which descriptor below indicates that the funds in that type of retirement account will be eligible for a tax-free withdrawal?

Employer-sponsored retirement plans that are approved by the IRS are said to be

Wage earners pay Social Security FICA taxes on wage income up to the maximum amount to which the full Social Security tax rate is applied.