Retirement Planning

1. Identify the characteristics of SIMPLE IRAs.

2. Identify the characteristics of SIMPLE 401 (K) plans.

3. Explain who is eligible to establish a 403 (b) plan.

4. What are 457 plans and what entities may establish them?

5. How are distributions from a 457 plan taxed?

6. What are the advantages and disadvantages of a 457 plan?

7. What are the applicable rules regarding employee contributions to 457 plans?

8. What are the rollover, distribution, and minimum distribution rules applicable to 403 (b) plans?

9. When does ERISA apply to a 403 (b) plan?

10. What are the rules for establishing a SIMPLE plan?

Solution Preview

Retirement Planning
1. Identify the characteristics of SIMPLE IRAs.
The SIMPLE IRA is often use by companies with at least 100 employees earning more than $5000 a year, in which case the firm opens individual retirement accounts for the different workers. Notably, contributions by the employees to this account to a maximum of 3%, with the actual amount often adjusted for factors such as inflation in the market.

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