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Retirement and Employee Benefits Planning Flashcards

6 cards from real CTFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Retirement and Employee Benefits Planning flashcards as text

  1. What is the required beginning date (RBD) for taking required minimum distributions (RMDs) from a traditional IRA under the SECURE 2.0 Act?

    Answer: April 1 following the year the owner turns 73

    Under the SECURE 2.0 Act, the required beginning date for RMDs shifted to April 1 following the year the IRA owner reaches age 73 (as of 2023).

  2. Under ERISA, which of the following is the correct definition of a plan fiduciary?

    Answer: Anyone who exercises discretionary authority over plan management or assets or provides investment advice for compensation

    ERISA defines a fiduciary functionally—anyone exercising discretionary control over plan management, assets, or providing investment advice for compensation qualifies.

  3. Which type of IRA allows qualified distributions to be completely tax-free in retirement?

    Answer: Roth IRA

    Roth IRA contributions are made with after-tax dollars, so qualified distributions of both contributions and earnings are completely income-tax-free in retirement.

  4. The 10-year rule under the SECURE Act requires most non-spouse inherited IRA beneficiaries to do which of the following?

    Answer: Distribute the entire inherited IRA within 10 years of the owner's death

    The SECURE Act eliminated the stretch IRA for most non-spouse beneficiaries and requires full distribution of the inherited IRA within 10 years of the original owner's death.

  5. Which qualified retirement plan type allows employer contributions only, with no employee elective deferrals?

    Answer: Simplified Employee Pension (SEP-IRA)

    SEP-IRAs are funded exclusively by employer contributions and do not allow employees to make elective salary deferrals.

  6. What is the maximum employee elective deferral limit for a 401(k) plan in 2024?

    Answer: $23,000

    The IRS limit on employee elective deferrals to 401(k) plans for 2024 is $23,000, with an additional $7,500 catch-up contribution allowed for those age 50 and older.