PSI Life Exam Practice Test 2025 - Free Life Insurance Exam Questions and Study Guide.

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Question: 1 / 150

What kind of retirement plan can a 75-employee for-profit corporation establish?

401(k) Plan

Pension Plan

SIMPLE IRA

A 75-employee for-profit corporation has the option to establish a SIMPLE IRA, which stands for Savings Incentive Match Plan for Employees. This type of retirement plan is specifically designed for small businesses and organizations with 100 or fewer employees, making it a suitable choice for a company of this size.

With a SIMPLE IRA, both employees and employers can contribute to the retirement plan, providing employees with a straightforward way to save for retirement while also benefiting from the employer's matching contributions. There are fewer administrative requirements compared to larger retirement plans, which makes it easier for smaller companies to implement and maintain.

While a 401(k) Plan and Pension Plan could also be options, they tend to have more complex rules and administrative requirements that may not be ideal for a smaller company structure. A Roth IRA is typically set up by individuals rather than employers and does not offer the same matching contribution options, which further distinguishes it from the SIMPLE IRA. Thus, given the parameters of a for-profit corporation with 75 employees, a SIMPLE IRA is the most appropriate retirement plan option.

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Roth IRA

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