INTRO TO PERS FINAN
INTRO TO PERS FINAN HACE 3200
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This 1 page Class Notes was uploaded by Jeffery Rohan on Saturday September 12, 2015. The Class Notes belongs to HACE 3200 at University of Georgia taught by Staff in Fall. Since its upload, it has received 20 views. For similar materials see /class/202286/hace-3200-university-of-georgia in Housing And Consumer Economics at University of Georgia.
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Date Created: 09/12/15
Chapter 16 Terms H gt 9 N V 00 gt1 0 O O H H H 9 N H H gt HH H gt19 V N u H o 5 so N H NNN bWN Definedbene t plan a traditional pension plan in which you receive a promised of defined pension payout at retirement The payout is based on a formula that takes into account your age at retirement salary level and years of service Noncontributory retirement plan a retirement plan in which the employer provides all the funds and the employee need not contribute Contributory retirement plan a retirement plan in which the employee possibly with the help of the employer provides the funds for the plan Portability a pension fund provision that allows employees to retain and transfer any pension benefits already earned to another pension plan if they leave the company Vested to gain the right to the retirement contributions made by your employer in your name In the case of a pension plan employees become vested when they ve worked for a specified period of time and thus gained the right to pension benefits Funded pension plan a pension plan in which the employer makes pension contributions directly to a trustee who holds and invests the employees retirement funds Unfunded pension plan a pension fund in which the benefits are paid out of current earnings on a payasyou go basis Cashbalance plan a retirement plan in which workers are credited with a percentage of their pay plus a predetermined rate of interest Definedcontribution plan a pension plan in which you and your employer or your employer alone contributes directly to a retirement account set aside specifically for you In effect a definedcontribution plan can be thought of as a savings account for retirement Pro tsharing plan a pension plan in which the company s contributions vary from year to year depending on the firm s performance The amount of money contributed to each employee depends on the employee s salary level Money purchase plan a pension plan in which the employer contributes a set percentage of employees salaries to their retirement plans annuall Thrift and savings plan a pension plan in which the employer matches a percentage of the employees contributions to their retirement accounts Employee stock ownership plan or ESOP a retirement plan in which the retirement funds are invested directly in the company s stock 401k plan a taxdeferred retirement savings plan in which employees of private corporations may contribute a portion of their wages up to a maximum amount set by law of 15500 in 2008 and thereafter these limits will rise with in ation in 500 increments Employers may contribute a full or partially matching amount and may limit the proportion of the annual salary contributed typically to 15 percent 403b plan a taxdeferred retirement plan that s essentially the same as a 401k plan except that it s aimed at employees of schools and charitable organizations Keogh plan a taxsheltered retirement plan for the selfemployed Simpli ed pension plan or SEPIRA a taxsheltered Qlou don t pay taxes on any earnings while they remain in the plan retirement plan aimed at small businesses or at the selfemployed Savings incentive match plan for employees or SIMPLE plan a taxsheltered retirement plan aimed at small businesses or the selfemployed that provides for some matching funds by the employer to be deposited in to the employee s retirement account Individual retirement account or IRA a tax advantaged retirement account The contribution may or may not be taxdeductible depending on the individual s income level and whether he or she or his of her spouse is covered by a company retirement plan Roth IRA an IRA in which contributions are not tax deductible That is you d make your contribution to this IRA out of aftertax income But once the money is in there it grows tax free and when it is withdrawn the withdrawals are tax free Coverdell education savings account or education IRA an IRA that works just like the Roth IRA except with respect to contributions Contributions are limited to 2000 annually per child for each child younger than 18 with income limits beginning at 95000 for single taxpayers and 190000 for couples The earnings are tax free and there is no tax on withdrawals to pay for education 529 plan taxadvantaged savings plans used only for college and graduate school Single life annuity an annuity in which you receive a set monthly payment for your entire life Annuity for life or a certain period a single life annuity that allows you to receive your payments for a fixed period of time Payments will be made to you for the remainder of your life but if you die before the end
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