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Benefits Beginner:
Introduction to 457(b) Plans
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Choose wisely. There is only one correct answer to each question.
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1.
If you quit your job and take a distribution from your 457 plan before age 59½, you _______.
Choose wisely. There is only one correct answer.
Will be assessed a 10% penalty
Will not be assessed a penalty
May be assessed a penalty
Will not be assessed a penalty. 457 plans do not assess penalties for early withdrawals upon termination of employment.
2.
If you withdraw $50,000 from your 457 plan and roll over only $40,000 into a new plan, what will happen to the other $10,000?
Choose wisely. There is only one correct answer.
You must forfeit it.
You will be taxed on it.
You will be required by law to reinstate it into a new 457 plan.
You will be allowed to keep it tax-free.
You will be taxed on it. The IRS will consider the $10,000 to be income if you do not put it into a new, eligible account.
3.
Which of the following words describe contributions that you can make to a 457 plan?
Choose wisely. There is only one correct answer.
Earnings on your contributions are tax-deferred
Your contributions are not taxed
Your withdrawals are taxed as ordinary income
All of the above
All of the above. All of the above are true of 457 plans.
4.
At what age MUST you begin taking distributions from your 457 plan?
Choose wisely. There is only one correct answer.
59½
73
You are not required to take distributions at any age
73. This age is standard for many retirement plans.
5.
If you work for a company that offers a 403(b) plan as well as a 457 plan, you can contribute to only one of them.
Choose wisely. There is only one correct answer.
True
False
False. You can contribute to both of them.
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