Which of the following scenarios pertaining to IRAs is NOT correct?
A) Walter is age 60. He may take a distribution from his IRA without having to worry about an early withdrawal penalty.
B) June has accumulated $30,000 in her IRA. At age 53 she withdraws $2,500 to take a vacation. She will have to include the $2,500 in her taxable income for the year and pay a $250 penalty.
C) Bradley, age 72, is covered by an employer sponsored retirement plan. He cannot establish a
traditional IRA.
D) Peter inherits $15,000 in IRA benefits from his father, who died in 2008. Peter can set up a tax-favored rollover IRA with the money and defer current income tax on the benefits received.
Accounting: What the Numbers Mean
9th EditionDaniel F Viele, David H Marshall, Wayne W McManus
345 solutions
Intermediate Accounting
14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
1,471 solutions
Financial Accounting
4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas
1,097 solutions
Century 21 Accounting: General Journal
11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman
1,012 solutions
-457 plans are non-qualified, deferred-compensation plans for government employees of states, counties, cities, their agencies, and political subdivisions, as well as tax-exempt organizations
-variable and fixed annuities are treated as non-qualified retirement plans
*With a non-qualified plan such as deferred compensation, the employer must pay annual income tax on investment earnings; but with an annuity, the
individual owner defers income tax until benefits are paid
*With a non-qualified plan, distributions are fully taxable as ordinary income; but with an annuity, the individual owner pays tax only on the earnings and excludes the return of the original investment.
Century 21 Accounting: General Journal
11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman
1,012 solutions
Fundamentals of Engineering Economic Analysis
1st EditionDavid Besanko, Mark Shanley, Scott Schaefer
215 solutions
Human Geography
13th EditionArthur Getis, Daniel Montello, Mark Bjelland
107 solutions
Mathematics with Business Applications
6th EditionMcGraw-Hill Education
3,760 solutions
A) how the plan measures investment performance.
B) the schedule for future needs of the plan.
C) investment parameters to be followed by the portfolio managers.
Under the rules of the Department of Labor (DOL),one of the most important documents participants are entitled to receive automatically when becoming a participant of an ERISA-covered retirement plan, is a summary of the plan, called the summary plan description or SPD. The plan administrator is legally obligated to provide to participants, free of charge, the SPD. The summary plan description is an important document that tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when and in what form benefits are paid, and how to file a claim for benefits. However, it has nothing to do with the investment policies that will be followed by the plan's advisers.