Question

Hi, Please help me to solve these questions with detail explanation . Thanks

Question 4
Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and contributes 18% of employees salary to the profit sharing plan. There is no additional match. If the ADP of the NHCEs is 3%, what is the maximum that Dustin can defer this year (2018)?
   A.   

$5,500.
   B.   

$13,750.
   C.   

$15,000.
   D.   

$18,500.

Question 5
Larry, age 55, is employed by BB Trucking Company as a tire repair specialist. He earns $62,000 per year and received an allocation of $40,000 to his employer-provided profit sharing plan for the year. If BB Trucking does not match employee deferrals, what is the maximum amount Larry can defer to his 401(k) plan for the 2018 plan year?
   A.   

$15,000
   B.   

$18,500
   C.   

$21,000
   D.   

$24,500

Question 6
Jacques, who is age 45, has just resigned from his current job. He worked for Ace, which sponsors a cash balance plan and a standard 401(k) plan. Each of the plans uses the longest permitted vesting schedule and both plans are top heavy. He has a balance of $40,000 in the cash balance plan, has deferred $20,000 into the 401(k) plan and has employer matching contributions of $10,000. If he has been employed for three years, but only participating in the plans for the last two years, how much does he keep if he leaves today?
   A.   

$ 20,000.
   B.   

$30,000.
   C.   

$60,000.
   D.   

$64,000.

Question 7
Mikael opened a fabulous restaurant ten years ago. The food is so exceptional that the restaurant has become one of the top spots in the city. Mikael, age 55, is the sole owner with compensation of 275,000. Mikael’s son Jamel, age 28, is the master chef with compensation of $100,000. Jamel has been with the restaurant full time since he turned 18. Mikael also employs 15 other individuals whose ages range between 25 and 35 and have compensation on average of $40,000 per year. Mikael wants to establish a profit sharing plan. Which of the following statements is true?
   A.   

If Mikael selected the standard allocation method and the plan contributes 10 percent per individual, the plan will contribute $55,000 to Mikael’s account.
   B.   

If Mikael selected the permitted disparity method and the plan contributes 10 percent per individual, the contribution the company makes for Mikael will be increased.
   C.   

Considering the needs and wants of Mikael and Jamel, an age-based profit sharing plan is the best plan for both of them.
   D.   

A new comparability plan is the least expensive, simplest way to meet both Mikael and Jamel’s retirement needs.
Question 8

Which of the following statements regarding an age-based profit sharing plan is correct?
   A.   

An age-based profit sharing plan provides a greater benefit to those plan participants whose earnings exceed the Social Security wage base and who are over fifty years old.
   B.   

An age-based profit sharing plan only provides a benefit to those plan participants whose age is within 10 years of the age of the owner of the plan sponsor.
   C.   

An age-based profit sharing plan provides greater benefits to the older plan participants.
   D.   

Younger plan participants in an age-based profit sharing plan usually receive the majority of the profit sharing plan allocation.

Question 9 :
Acme Inc., is establishing a retirement plan and they want a plan that includes a Roth account. Which of the following statements is correct about Roth accounts?
   A.   

Matching contributions can be contributed to Roth account.

   B.   

Amounts in a traditional 401(k) plan cannot be rolled over to a Roth account.
   C.   

Roth accounts do not require minimum distributions until after the death of the participant.

   D.   

Roth accounts permit access for taxpayers who may otherwise not be able to contribute to a Roth IRA.

Question 10
Which of the following qualified plans would allocate a higher percentage of the plan’s current contributions to a certain class or group of eligible employees?

    A profit sharing plan that uses permitted disparity.
    An age-based profit sharing plan.
    A defined benefit pension plan.
    A target benefit pension plan.

   A.   

1 only
   B.   

1 and 3
   C.   

2 and 4
   D.   

1, 2, 3, and 4

Answer 1

Answer 4 Whether you are nearing retirement or just starting your career, it is always the right time to begin planning for your financial future. If your employer offers a 401(k), it can be one of the simplest and most effective ways to save for your retirement. While thecheif advantage of this plan is that it allows you to defer a portion of your paycheck to your retirement account each month automatically, there are some limitations on how much you can save.

Each year, usually in October or November, the Internal Revenue Service (IRS) reviews and sometimes updates the maximum contribution limits and other retirement savings vehicles. Depending on your age and compensation level, you may be subject to different limits. Stay up-to-date on the most current regulations to ensure you make the most of your employer-sponsored plan.

Dustin can defer $18500.

The 2018 401(k) contribution limit. As I mentioned, the 401(k) contribution limit in 2018 is increasing by $500 over the 2017 limit to $18,500. This limit also applies to other qualified retirement plan types, such as 403(b) plans, most 457 plans, and Thrift Savings Plan accounts

Answer 5

Answer 18500

The 2018 401(k) contribution limit. As I mentioned, the 401(k) contribution limit in 2018 is increasing by $500 over the 2017 limit to $18,500. This limit also applies to other qualified retirement plan types, such as 403(b) plans, most 457 plans, and Thrift Savings Plan accounts.

Answe 10.

D

All the listed plans would allocate a higher percentage of a plan’s current cost to a certain class of eligible

Answer 9 A

Roth IRA is a special retirement accountthat you fund with post-tax income (you can't deduct your contributions on your income taxes). Once you have done this, all future withdrawals that follow Roth IRA regulations are tax free.

When you consider employer contributions to Roth IRAs, the main obstacle is that under payroll deduction, it's always up to the employee to decide where paycheck funds go. The employer can increase an employee's wages, but it can't force the employee to set that money aside in a Roth IRA or any other retirement account.

Moreover, the employer also needs to understand that even with the payroll deduction method, any limitations on the employee's ability to contribute to a Roth IRA are still in place. Therefore, the maximum limit of $5,500 annually for those under 50 or $6,500 for those 50 or older applies. Moreover, if the employee's income exceeds certain limits, then Roth IRA contribution might not be possible at all