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Retirement Intermediate:
Special Types of Individual Retirement Accounts
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1.
Employers are required to contribute to their employees' SEP-IRAs.
Choose wisely. There is only one correct answer.
True
False
False. Employer contributions are voluntary.
2.
SIMPLE IRAs are sponsored by whom?
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Employers
Employees
Neither employers nor employees
Employers. The SIMPLE IRA is an employer-sponsored retirement plan.
3.
SIMPLE IRAs may be funded by _______.
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Employee salary reduction contributions
Employer contributions
Both employer contributions and employee salary reduction contributions
Both employer contributions and employee salary reduction contributions. However, an employee may elect not to make a contribution.
4.
All of the following are IRS maximum guidelines for SEP-IRA eligibility except that _______.
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During the immediately preceding five years, the employees must have worked for the company for three years
Employees must receive $5,000 or more in compensation for that tax year
Employees must be at least age 21
Employees must receive $5,000 or more in compensation for that tax year. The rule is, the employees must receive $750 or more.
5.
Employees whose retirement benefits are covered by union contracts may not participate in SIMPLE or SEP-IRAs.
Choose wisely. There is only one correct answer.
True
False
True. This rule prevents double retirement coverage.
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