1. Question :
Diane and Amanda, who are 28-year-old twins, are partners in a
computer software consulting firm with 20 employees. The
average age of
... [Show More] their employees is 25 and their length of
employment averages 3 years. The firm is profitable and enjoys
stable cash flows. Diane and Amanda have talked about a
retirement plan as an employee benefit and do not want to
assume the investment risk of the plan. The partners do wish to
encourage employees to make elective deferrals.
Of the following retirement plan options, which is best suited for
their business?
Student Answer: A Section 403(b) plan
An eligible Section 457 plan
A profit-sharing plan with a Section 401(k) provision
A stock bonus plan
Points Received: 2 of 2
Comments:
Question 2
.
Question :
What is the covered compensation limit for determining employer
contributions and plan benefits for qualified plans in 2015?
Student Answer: $210,000
$18,000
$53,000
$265,000
Points Received: 2 of 2
Comments:
Question 3
.
Question :
Allison and Nick anticipate they will require an annual income of
$50,000 (in current dollars) when they retire 15 years from now.
They expect to receive Social Security benefits of $20,000 per
year at that time. In calculating their retirement savings need, the
couple is assuming a 3% annual rate of inflation, an 8% after-tax
return on investments, and a 25-year retirement period. Without
considering any Social Security benefit that may be available,
what is the couple's total retirement fund need?
Student Answer: $1,356,449
$831,544
$764,522
$1,168,178
Points Received: 0 of 2
Comments:
Question 4
.
Question :
Ryan (age 50) is employed by Best Mutual Funds (BMF) and
participates in its profit-sharing Section 401(k) plan for 2015. The
plan allocates contributions based on relative compensation and
is not integrated with Social Security. Ryan's current annual
compensation is $80,000, and he has elected to defer 5% of
compensation into the Section 401(k) plan. Including Ryan, 35
employees with a total covered payroll of $1.8 million participate
in the plan and have elected to defer a total of $72,000 (4% of
payroll). What is the maximum deductible contribution to the
profit-sharing plan BMF can make for 2015?
Student Answer: $220,000
450,000
$378,000
$522,000
Points Received: 0 of 2
Comments:
Question 5
.
Question :
Blake and Margaret are married, file their income taxes
separately, and are both age 59½. Blake makes elective deferrals
into his employer's Section 401(k) plan. Margaret works for a
nonprofit and makes elective deferrals to her employer's Section
403(b) plan. In 2015, Blake has a MAGI of $45,000 and Margaret
has a MAGI of $40,000. Which of the following statements
regarding Blake and Margaret and their retirement planning is
NOT correct?
Student Answer: Blake and Margaret cannot make a deductible contribution to
an IRA in 2015.
Blake is an active participant.
Because Margaret participates in a Section 403(b) plan, she
is considered an active participant.
Blake and Margaret may make a deductible contribution to
an IRA in 2015.
Points Received: 2 of 2
Comments:
Question 6
.
Question :
Mark died this year fully insured under Social Security. Which of
his unmarried, dependent children is eligible for a survivor's
benefit from Social Security based upon Mark's fully insured
status?
Student Answer: Mark, Jr., age 20, and Glenn's twin, who lives away from
home
Glenn, a 20-year-old child still in high school
Beverly, age 22, who has been disabled for 4 years
A 19-year-old child in junior college
Points Received: 2 of 2
Comments:
Question 7
.
Question :
All of the following workers are covered under the Social Security
system EXCEPT
Student Answer: an independent contractor
a self-employed individual
certain federal civil service workers hired prior to 1984
a minister [Show Less]