Font size
WorksheetsEmployee Benefits: Retirement
Total questions: 15
Worksheet time: 8mins
Gross pay refers to the actual money that you take home to your family.
True
False
Identify all factors that are important when determining a retirement savings goal?
Desired lifestyle
Spending & Saving habits
Desired age for retirement
Potential spouse's income
Financial advisors recommend that investors set aside this percentage of their income for retirement.
5%
10%
15%
It doesn't matter. Any amount is sufficient.
How is a defined benefit plan different from a defined contribution plan?
A way that a defined benefit plan is different from a defined contribution plan is that:
An employee is solely responsible for contributing to it.
An employer is solely responsible for contributing to it.
It's provided by all employers currently.
Both employer and employee contribute to it.
Identify one example of a defined benefit plan.
401(k)
Social Security
Pension
Traditional and Roth Individual Retirement Accounts
Contributing money "pre-tax" to a 401(k) or Traditional Individual Retirement Account (IRA) is better to some people. Why? Identify all correct justifications.
Because potentially less income tax will need to be paid to the government.
Because this lowers a person's "taxable income" (i.e., the amount of income subject to tax).
Because the person expects to earn more when s/he/they retire.
The biggest benefit of making contributions to a 401(k) or Roth IRA after taxes (i.e., with your net pay), is:
You have control over how much you contribute and can adjust as needed without any difficulty.
Withdrawals from both accounts will be taxed less while in retirement.
Withdrawals from both accounts are tax-free while in retirement.
In this type of retirement account, some employers can match the percentage of your contributions to it.
Pension
401(k)
Traditional IRA
Roth IRA
Select all that are true about employer matching contributions:
All employers will match their employees contributions.
Employers generally set a limitation (e.g., percentage) on how much they will contribute.
If an employee doesn't contribute the maximum that his/her/their employer will contribute, then the employee is losing money.
If/when you leave your employer, you have a legal right to take both your own and employer's contributions to your account. No conditions need to be met.
In order for employees to have a legal right to the money their employer contributes to a retirement plan (e.g., Pension), they must be __________ . HINT: This is measured by the employee’s years of service.
a high-performing employee
a minimum age
vested
recommended by their immediate supervisors
You just graduated from college and have been fortunate to have received two job offers in your chosen field of accounting. Indicate the factors that might influence your decision about which firm to join? Select all that apply.
The career opportunities that each firm offers beyond your entry level position
Combination of salary and benefits package
The company's tax rate
Both the career advancement opportunities, salary, and benefits package.
All employers offer this type of account:
Pension
401(k)
Traditional IRA
Rother IRA
None of the above
Contributions made are deducted automatically from your paycheck each pay period based on your employee benefits elections.
Pension
401(k)
Traditional IRA
Roth IRA
Contributions made are deducted from your bank account (e.g., checking account) at your will.
Pension
401(k)
Traditional IRA
Roth IRA
True/False: If you take advantage of an employee-sponsored retirement plan, you cannot open a retirement account with a financial institution.
True
False
