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Benefits Intermediate: How to Contribute to Retirement Plans

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1.
Jennifer is self-employed, operating a graphic design studio out of her home. She recently established the following type of employer retirement plan:
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Keogh. A Keogh is available to people who are self-employed or who work for an unincorporated business.
2.
If you participate in a 401(k) plan, it is possible to contribute up to 100 percent of your compensation.
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True. If you participate in a 401(k) plan, you may contribute up to 100 percent of your compensation if it is less than the current allowed contribution limit.
3.
Your employer must make a contribution to your retirement account if you participate in a _______.
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SIMPLE IRA. If your employer offers a SIMPLE IRA, it generally must match your contribution up to 3 percent of your compensation.
4.
When you resign or retire from your job, your employer may continue to make contributions to your retirement plan.
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False. Your plan is tied to your employment, so employer contributions cease when you leave the organization.
5.
Employer retirement plans offer all of the following except _______.
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Tax-free savings for retirement. You pay taxes on your investment in the employer retirement plan only when you withdraw money from your account at retirement.