Rule Atlas
ERISA: IRAs, 401(k)s, and Qualified Structures
Under ERISA (NASAA / SEC / Uniform Securities Act), iRAs, 401(k)s, and Qualified Structures establishes the authoritative rules tested on the NASAA Series 65. Explores the core features, tax implications, and suitability of various retirement savings vehicles including Traditional IRAs, Roth IRAs, and employer-sponsored qualified plans for Series 65 candidates. VoraPrep verifies every threshold, worked table, and practice question below against the current NASAA Series 65 blueprint.
Current Statutory Thresholds & Limits in Effect
Designated Roth 401(k)/403(b) accounts have zero lifetime RMDs starting 2024.
Core Statutory Concepts
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Contributions | Pre-tax (potentially deductible) or After-tax | After-tax (never deductible) |
| Growth | Tax-deferred | Tax-free |
| Distributions | Taxed as ordinary income (if deductible basis) | Tax-free (if qualified distribution) |
| RMDs | Begin at age 73 (or 75) | No RMDs for original owner |
| Income Limits | No income limit for contributions (but for deductibility) | Subject to MAGI limits for contributions |
| Contribution Age Limit | No age limit for contributions (with earned income) | No age limit for contributions (with earned income) |
An investment adviser is explaining the features of a 401(k) plan to a client. Which of the following components of a 401(k) plan is typically subject to a vesting schedule, meaning the employee gains full ownership only after meeting certain conditions?
Practitioner Application: IRAs, 401(k)s, and Qualified Structures
Your client, a 45-year-old physician earning $350,000 annually, is self-employed and has maximized contributions to their SEP IRA. They want to save more for retirement and are debating between opening a Traditional IRA or a Roth IRA, considering both current tax deductions and future tax-free growth. How do you advise them on the best option, considering their income and existing plans, and what are the key differences a Series 65 candidate must understand for the exam?
- Retirement planning is a crucial area for investment advisers, requiring a deep understanding of various plan types, their tax implications, and suitability for different client situations. The Series 65 exam heavily tests the distinctions between individual retirement accounts (IRAs) and employer-sponsored 'qualified' plans.
- Individual Retirement Accounts (IRAs) IRAs are personal savings vehicles that allow individuals to save for retirement on a tax-advantaged basis. The two primary types tested are Traditional and Roth IRAs.
Common NASAA Series 65 Distractors on ERISA
- 1⚠️ Exam trap: Confusing Traditional and Roth IRA RMD rules. Test questions often try to trick you into applying RMDs to Roth IRAs for the original owner. Remember: 'NO RMDs for the original owner of a Roth IRA.'
- 2Traditional IRA: Contributions may be deductible, growth is tax-deferred, distributions are taxed, RMDs start at age 73/75.
- 3Roth IRA: Contributions are after-tax, growth and 'qualified' distributions are tax-free, NO RMDs for original owner, subject to MAGI limits for contributions.
- 4Qualified Plans (e.g., 401(k)): ERISA-governed, tax-deferred growth, potentially employer match, generally subject to RMDs.
- 5RMD Age: For Traditional IRAs, RMDs begin at age 73 (for those born 1951-1959) or age 75 (for those born 1960 or later).
Frequently Asked Questions: ERISA
What is the core rule under ERISA (IRAs, 401(k)s, and Qualified Structures)?
Under ERISA (NASAA / SEC / Uniform Securities Act), iRAs, 401(k)s, and Qualified Structures establishes the authoritative rules tested on the NASAA Series 65. Explores the core features, tax implications, and suitability of various retirement savings vehicles including Traditional IRAs, Roth IRAs, and employer-sponsored qualified plans for Series 65 candidates. VoraPrep verifies every threshold, worked table, and practice question below against the current NASAA Series 65 blueprint.
How is ERISA tested on the NASAA Series 65?
⚠️ Exam trap: Confusing Traditional and Roth IRA RMD rules. Test questions often try to trick you into applying RMDs to Roth IRAs for the original owner. Remember: 'NO RMDs for the original owner of a Roth IRA.' Traditional IRA: Contributions may be deductible, growth is tax-deferred, distributions are taxed, RMDs start at age 73/75.
Where can I practice NASAA Series 65 questions on IRAs, 401(k)s, and Qualified Structures?
Test yourself instantly with the free playable NASAA Series 65 question on this page, or launch VoraPrep's full NASAA Series 65 adaptive question bank, interactive lessons, and 1:1 exam simulator at voraprep.com/series65.