FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Annuities and Individual Retirement Accounts

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements is true concerning traditional and Roth IRAs?

A) The investment income portion of Roth IRA distributions must be reported as taxable income.
B) Roth IRA contributions are tax deductible.
C) There are minimum distribution requirements for traditional IRAs.
D) There are no limits on the tax deductibility of traditional IRA contributions once the account owner has reached age 50.

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

During the funding period,the premiums paid for a variable annuity are used to purchase

A) annuity units.
B) immediate participation shares.
C) mutual fund shares.
D) accumulation units.

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Which of the following statements is (are) true with regard to IRAs? I.Contribution limits are higher for workers aged 50 and older. II.A spouse who does not work outside of the home may make a fully deductible contribution to a traditional IRA even if his or her spouse is covered by a retirement plan at work.

All of the following are permissible IRA investments EXCEPT

Which of the following statements regarding the taxation of individual annuities is (are) true? I.The exclusion ratio is the percentage of the annuity income that is taxable. II.After the net cost of the annuity has been paid to the annuitant,the total annuity payment is taxable.

Under an equity-indexed annuity,what name is given to the percentage increase in the stock index that is credited to the contract?

An immediate life annuity offers all of the following benefits EXCEPT

Bridget started to fund a variable annuity.Three years later,she experienced financial difficulty.She called her agent and cancelled the contract.The insurer returned all but 4 percent of the account balance.The 4 percent kept by the insurer is a(n)

Which of the following statements is (are) true regarding the taxation of distributions from individual annuities? I.Individual annuity distributions are never taxable. II.Once the annuitant has recovered the premiums he or she paid for the annuity,the entire annuity distribution is taxable.

Which of the following statements is true with regard to the adequacy of IRA funds during retirement? I.To assure lifetime income,the IRA funds can be used to purchase a life annuity. II.The duration of IRA benefit payments depends on the rate of return earned on the invested assets after retirement and the withdrawal rate.

Which of the following statements is (are) true with regard to the inflation-indexed annuity option? I.The initial monthly payment is lower than the initial payment a fixed annuity would have provided if purchased at the same age. II.Periodic payments to the annuitant are adjusted for inflation.

The fundamental purpose of a variable annuity is

Which of the following statements is (are) true regarding the Roth IRA? I.Roth IRA contributions are tax deductible. II.Roth IRA investment income accumulates income-tax free.

Insurers offering variable annuities charge a number of fees and expenses.One category of fees and expenses is charged to cover the cost of record keeping,paperwork,and periodic reports to annuity owners.This expense is the

Insurers offering variable annuities charge a number of expenses.One category of expenses is to pay the fund manager and to pay brokerage fees.This expense is the

Which of the following statements regarding individual retirement account s (IRAs) is (are) true? I.If an individual's only income during the year is from investments,he or she cannot make an IRA contribution. II.The funds in the IRA can be used to purchase life insurance on the owner.

Juanita paid a life insurer $45,000 in exchange for an immediate life annuity.Juanita will receive $500 per month from the insurer,and her life expectancy is 15 years (180 months) .What is the exclusion ratio in this case?

Which of the following statements about the withdrawal of funds from a traditional IRA is true?

Juanita paid a life insurer $45,000 in exchange for an immediate life annuity.Juanita will receive $500 per month from the insurer,and her life expectancy is 15 years (180 months) .Assume that Juanita receives 12 monthly payments of $500 the first year.How much taxable income must she report?

Which of the following statements about converting a traditional IRA to a Roth IRA is (are) true? I.Such conversions can be done with no income tax consequences. II.Qualified distributions from a Roth IRA after a conversion are received tax-free.