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Chapter 16

Multiple Choice

Multiple Choice


This activity contains 10 questions.

	ERISA provides insurance protection for   employer sponsored defined benefit plans individual Retirement Accounts. employer sponsored defined contribution plans. commercially provided annuities

	A “qualified tax deferred” retirement plan typically defers taxes until the worker   receives distributions. terminates employment. dies. reaches retirement age.

	In you are in the 27% marginal tax bracket, a $1,000 contribution to a traditional IRA reduces your taxes in the current year by   $270 $1,000 $0 $730

	In you are in the 27% marginal tax bracket, a $1,000 contribution to a Roth IRA reduces your taxes in the current year by   $730 $1,000 $270 $0

	Defined contribution plans   specify the current contribution to the investment account, but not the future worth of the account. accumulate only non-vested retirement benefits. guarantee specific monthly payments at retirement age. combine the contributions of all employees into a single investment account.

	Voluntary employee contributions to a company sponsored retirement plan   are not subject to the same tax deferral advantages as employer contributions. must be immediately vested. may be lost if the employee changes employment. are generally not permitted.

	Married spouses of workers with qualified retirement benefits   are entitled to survivor benefits, unless the married spouse has specifically declined them. are not entitled to survivor benefits from the retirement plan. are only entitled to survivor benefits if the covered worker approves them. are only entitled to survivor benefits if the married spouse has specifically requested them while the covered worker was alive.

	Under current provisions in the Social Security Act   Social security benefits for those who work beyond age 65 will decline. Social security benefits for upper income individuals are set to decline. Early retirement age will decline. Normal retirement age will increase beyond age 65.

	Early distributions from a traditional IRA account before age 59-1/2   Are always subject to a tax penalty. Are subject to a tax penalty unless they have been withdrawn for certain tax-qualified purposes such as paying large medical bills. Prohibited. Are subject to a tax penalty if they have been invested for less than 5 years.

	Distributions form a traditional IRA account   Must begin at normal retirement age. May be deferred indefinitely. Must begin by age 70-1/2. Must be taken in equal increments over the retirees expected lifetime.

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