When should I take my Canadian Pension Plan distributions?

June 30, 2024 No Comments

A: The Canadian Pension Plan (CPP) is a retirement program from which contributing Canadians may receive payments at the age of 60 or upon a disability. The program, however, does not start immediately paying you upon retirement, disability or at the age of 60 because

When to apply for Social Security retirement benefits

June 30, 2024 No Comments

A: Applications for Social Security benefits can only be processed a maximum of four months before benefits are scheduled to begin. Thus, the earliest you can apply is age 61 and nine months, and you can expect to receive your first payment four months later

Which of the Following Accounts Does ERISA Cover?

June 30, 2024 No Comments

A: A. IRA B. State employee pension plan C. Corporate defined-benefit plan D. Coverdell savings account Answer: C The correct answer is “C.” ERISA covers most employer retirement plans, but public employee plans are exempt from coverage. “A” is not correct because the IRA is

Who bears the investment risk in 401(k) plans?

June 30, 2024 No Comments

A: Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad sense, there are two benefit formulas that will calculate the pension benefits the plan member will receive. In the case of

Who is eligible for Canada Pension Plan benefits?

June 30, 2024 No Comments

A: Nearly all individuals who work inside of Canada are eligible to contribute toward and receive benefits from the Canada Pension Plan, or CPP. The CPP is a deferred income retirement vehicle that has been in place since 1965 when it was introduced as a

Why are insurance companies and pension funds considered financial instruments?

June 30, 2024 No Comments

A: Insurance policies are widely considered to be financial instruments. Pension funds may contain many different types of financial instruments, although they are not always classified as such. Most tax regimes, including those in the United States, offer special treatment for the value of insurance

Why are IRA, Roth IRAs and 401(k) contributions limited?

June 30, 2024 No Comments

A: Contributions to IRA, Roth IRA, 401(k) and other retirement savings plans are limited by the IRS to prevent the very wealthy from benefiting more than the average worker. Contributions to traditional IRA and 401(k) accounts are made with pretax dollars, so they can offer

Why did my employer delay 401(k) distributions?

June 30, 2024 No Comments

A: Your employer or the plan administrator for the 401(k) plan should have provided you with a copy of the 401(k)’s summary plan description (SPD). If you can’t find your copy, contact your employer and ask for a replacement. A copy of the plan’s SPD

Why is my 401(k) not FDIC-Insured?

June 30, 2024 No Comments

A: 401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit Insurance Corporation (FDIC) covers deposits, not investments. Investments are riskier and carry the potential for loss of principal. Most 401(k) accounts are composed of investments. However,

What does amortization mean in the context of a pension plan?

June 30, 2024 No Comments

A: There are two primary needs for amortization within the context of a company’s pension plan. The first instances might include a company determining whether to apply current or new pension benefits retroactively to employees who performed services before the current iteration of the pension

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