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1.
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.
2.
Certain senior employees can make a catch-up contribution to their 457 plan in addition to the one already allowed.
True. There are restrictions and rules, but a certain class of employees does have this benefit.
3.
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.
4.
If you quit your job and take a distribution from your 457 plan before age 59½, you _______.
Will not be assessed a penalty. 457 plans do not assess penalties for early withdrawals upon termination of employment.
5.
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.