Quiz Trivia #2 for Rolling your 401(k) – Trustee to Trustee Direct Rollover, Modified Adjusted Gross Income (MAGI) Income Limits for Deductible Contributions to a Traditional IRA

1) Employees must fill out a distribution election form when they:

a) Join a new employer
b) Leave or quit an old employer
c) After 1 years of service with their current employer
d) After being 100% fully vested with their current employer

2) With a direct 401(k) rollover, your retirement funds are distributed directly from

a) Your old employer’s 401k plan to either your new employer’s 401k plan or a Roth IRA.
b) Your old employer’s 401k plan to either your new employer’s 401k plan or a Traditional IRA.
c) Your old employer’s 401k plan to either your new employer’s 401k plan or a 475 government plan.
d) Your old employer’s 401k plan to either your new employer’s 401k plan or a 403(b) plan.
e) All of the above

3) If you quit your old employer and decide to take cash distribution of your 401(k) retirement funds, the IRS will set a _______% withholding tax on your funds.

a) 15%
b) 18%
c) 20%
d) 25%

4) As an example, if you have $100,000 in your 401(k) that is made payable to you in a check, your employer will withhold $_______ for remittance to the government.

a) $15,000
b) $18,000
c) $20,000
d) $25,000

5) If you choose to take a cash distribution of your 401(k) retirement funds and plan to rollover to your traditional IRA, you have a maximum of _____ # of days within which you must complete this, otherwise you will face the 20% withholding penalty as well as a 10% early withdrawal penalty as well as owe taxes on your distribution.

a) 40 days
b) 50 days
c) 60 days
d) 75 days

6) You should let your employer know right away that you want to do a 401k or IRA rollover if your retirement balance is less than $1,000.

a) True
b) False

7) If you choose to rollover your 401(k) funds to a traditional IRA, you can make either a:

a) Deductible contribution to your traditional IRA where the funds can be deducted from your income taxes
b) Non-deductible contribution to your traditional IRA where the funds can NOT be deducted from your income taxes
c) Cash out contribution to your traditional IRA where you just make a lump sum deposit of the funds to a traditional IRA without considering or worrying about taxes.
d) Both a and b.

8) The advantage of rolling to a deductible traditional IRA is that you can deduct your contributions from your income tax now.

a) True
b) False

9) The modified adjusted gross income limit (MAGI) for 2009 for a single filer is:

a) $50,000 - $59,999
b) $53,000 - $63,000
c) $55,000 - $65,000
d) $57,000 - $67,000

10) The modified adjusted gross income limit (MAGI) for 2009 for a married filing joint family is:

a) $101,000 - $116,000
b) $105,000 - $120,000
c) $108,000 - $123,000
d) $110,000 - $125,000