Thursday, June 14, 2012
KNOW YOUR 401(k) LIMIT! (A Mini Quiz)
2:32 PM | 
Posted by
pensionfinancialservices |
Specifically,
what are some of the 401(k) limits in 2012?
The subject
is crucial, of course, in retirement planning, so we’ve had a series of posts
on 401(k) plans, including most recently, one on hidden fees. Now we turn to 401(k)
limits and/or restrictions, and only a general sense of how much you know or
don’t know—either as employer or employee—can be gleaned by answering a few
questions in this mini true-or-false quiz that’s probably considerably shorter
than any you took in school.
Be aware,
though, that when it comes to money and retirement issues, having the right
answers to even a few relatively simple questions is no small matter. In fact,
anything less than a perfect score here—or your uncertainty about any other
aspects of a 401(k) plan (the tax implications, or changing your job, for
example)--might be added reason to bone up on 401(k) rules by contacting the
experts at Pension Parameters Financial Services, Inc. and determine their
possible impact on you or your business.
1. The
maximum amount an employed 45-year-old can contribute to a 401(k) in 2012 is
$17,000. True or false?
2. For an
employed 55-year-old, the amount is $21,500? True or false?
3. For a
retired 65-year-old, the amount is zero. True or false?
4. The
minimum number of employees required to establish a 401(k) plan is 10. True or
false?
5. If you
aren’t a company’s owner, you must begin taking distributions from its 401(k)
plan at age 59 1/2. True or false?
6. A
rollover from a 401(k) plan to an IRA is subject to a 20% withholding tax
unless you arrange a trustee-trustee transfer. True or false?
[Answers:
1-true. 2-d, the correct amount is$22,500. 3-true; 4-false, 1 is sufficient.
5-false, the correct answer is at age 70 1/2 or your retirement date, whichever
comes first. 6-true.]
Labels:
401(k) limits
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1 comments:
Nice post. Nice information about retirement planning. Nice topic for retirement planning. Thanks for sharing.
Chris Schlegel The Financial Corp
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