1. A Ross IRA distribution is considered to be qualified if the five-year holding pattern has
been met and - ANS-The distribution is made after age 59 1/2
2. The distribution is made of the following owners death
3. The distribution is made to find a first time home purchase maximum $10,000
4. An individual is not considered an active participant in an employer sponsored defined
contribution plan if they only receive what - ANS-Interest
5. Before employing a pension maximization strategy a retiree needs to consider - ANS-His
age and the age of his spouse, health and insurability, the cost of taking a joint life
versus a single life annuity, his tax bracket and financial situation and whether health
insurance benefits will be impacted
6. Describe the difference between term life and cash value life - ANS-Term life provides a
death benefit equal to the face value of the policy
7. Cash value life provides a death benefit and an element of tax deferred savings
8. Do RMD rules apply to Roth IRA - ANS-No
9. Earned income as defined by the internal revenue code includes - ANS-Alimony, salary,
bonuses, fees, commissions
10. Explain the loan provision option in cash value policies - ANS-Policyholders can borrow
an amount equal to some or all of their accumulated cash value
11. Facts about a Roth IRA - ANS-With drawls from a Roth IRA for a first time home
purchase, up to $10,000, or not penalized if the five-year holding period has been met.
Total IRA contributions, both Ross and traditional, or aggregated and cannot exceed
$6000. Distributions of principal from a Roth IRA are not subject to the 10% penalty.
Finally a Roth Aire is not subject to RMD rules, although Roth 401(k) are
12. Fixed annuities - ANS-The premiums in a fixed annuity or invested in the companies
general account
13. Flexibility is the key word that describes what type of life insurance - ANS-Universal life.
14. Give examples of income that is not considered earned - ANS-Unemployment
compensation, passive income, deferred compensation, pension and annuity payments,
Social Security, Worker's Compensation, and capital gains
15. How are lump sum distribution's from a nonqualified annuity taxed - ANS-Fully taxable
until all earnings have been distributed, this is referred to as last in first out
16. How do an individual's retirement plan contributions affect active participation status -
ANS-An individual who makes voluntary or mandatory requirement plan contributions is
an active participant
17. How do you investment earnings affect active participant status - ANS-The individual is
not an active participant if only earnings are allocated to their account
18. How long is a Roth IRA owner required to hold the account before taking a tax free
distribution - ANS-A minimum of five years starting on January 1 of The year the first
contribution is made and the owner must be at least 59 1/2
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