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In 1935, Lord Moynihanand R. Killick Millardformed The VoluntaryEuthanasia Society. ThisEnglish organization,now called EXIT,provides informationabout living wills,self-deliverance, andeuthanasia.Roth IRA A Roth IRA is an attractive way to save for retirement.Distributions (withdrawals) are not required during your lifetime. Whentaken after age 59 1 /2, distributions are tax free if you have had the accountfor five years.Coverdale Education Savings Account A Coverdale EducationSavings Account can be established for a child under eighteen by anyonewho wants to save for the child’s college education. The interest onthe savings is tax free and there is no early withdrawal penalty. Theamount saved for each child may not exceed $2,000 a year.Simplified Employee Pension Plan A Simplified Employee PensionPlan (SEP) is an IRA funded by an employer. Money is withheldfrom an employee’s pay and placed in the IRA account. Employers maycontribute up to 25 percent of the employee’s pay or $41,000—whicheveris lower. The money invested in the plan is not taxed until it is withdrawnand cannot be withdrawn without penalty before the age of 59 1 /2.Keogh PlansA Keogh plan is a retirement plan for self-employed people andtheir employees. Contributions to the plan are tax deductible, and the interestearned is tax-deferred until the money is withdrawn. The savingscan build to age 70 1 /2, at which time the retiree must begin to withdrawthe money.Reviewing What You Learned1. What is the purpose of social security?2. Explain the difference between a noncontributoryand a contributory pension plan.3. What are the pension rights given to peopleunder ERISA?4. Describe a traditional IRA, a Roth IRA,a Coverdale Education Savings Account, aSimplified Employee Pension Plan, anda Keogh plan.Critical Thinking ActivityPreparing for Retirement Many Americansbelieve that if they are covered under anemployer’s retirement plan, they will have asatisfactory income after they retire. Explainthe flaw in this reasoning.Legal Skills in ActionEvaluating Retirement Plans As you thinkabout your future career, the retirement planthat a job offers is an important benefit toconsider. Evaluate the different types of plansdiscussed in this section and choose the oneyou think is best for you. With a partner,explain the reasons for your selection.778 Unit 7: Planning for the Future