Sam Retired Last Year and Will Receive Annuity Payments for Life

question 49

Multiple Choice

Sam retired last year and will receive annuity payments for life from his employer's qualified retirement plan of $30,000 per year starting this year.During his years of employment,Sam contributed $130,000 to the plan on an after-tax basis.Based on IRS tables,his life expectancy is 260 months.This year,Sam will include what amount in income?

• A)0
• B)$6,000
• C)$24,000
• D)$30,000

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Definitions:

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety or to face reality.

Rationalization

The process of explaining one's behavior or decisions with plausible reasons, often to hide true motives.

Reaction Formation

A defense mechanism where an individual unconsciously replaces unacceptable impulses with their opposites.

Forbidden Impulse

A desire or thought that is repressed or deemed unacceptable by societal standards or personal conscience, often explored in psychoanalytic theories.