Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Yearly changes in the maximum allowed contribution to a 457 plan are based upon _______.
Inflation. The federal government indexes these changes to inflation; in years when the inflation rate isn't sufficiently high, there will not be a rise in the contribution limit.
2.
There is no penalty on early distributions from a 457 plan upon termination of employment, whether voluntary or involuntary.
True. This is one way that 457s differ from other plans.
3.
If you work for your city government, you are normally eligible for a 457 plan.
True. A 457 plan is specially made for city and state government employees.
4.
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?
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.
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.