What does it mean?
The retirement planning conversations usually involve the employer-employee relationship. For individuals who are self-employed, self-directed retirement programs also allow them to plan for their retirement.
Match the self-directed retirement program terms on the right with the descriptions of the terms on the left. (Hint: These are not necessarily complete definitions, but there is only one possible answer for each term.)
Description
With this account, all withdrawals from the account are tax free provided that the account has been open for at least five years and the individual is past age 59 1/2.
This type of account can be opened by anyone without a retirement plan at his or her place of employment, regardless of income level.
Regardless of income level or participation in an employer retirement plan, a contribution made with after-tax dollars can open this type of account.
For Keogh and IRA accounts, the magic age is 59 1/2 or will be subject to a 10% penalty.
Aimed at small-business owners, this plan is similar to a Keogh plan.
Term
SEP plan
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