Quiz: Understanding Retirement Planning

What is one of the main advantages of contributing to a 401(k) plan? *

Contribuations are made after-tax

You get tax-free withdrawals in retirement

Employer matches are required

Contributions reduce your taxable income for the year

Which type of retirement account allows for tax-free withdrawals in retirement? *

Traditional IRA

SEP IRA

Roth IRA

401(k)

What is a key feature of a SEP IRA? *

Contributions are limited to $6,500 anually

Only the employer can contribute to the account

Catch-up contributions are allowed for individuals over 50

Withdrawals are tax-free

At what age can you withdraw from a 401(k) without facing a 10% penalty? *

50

59 ½

62

65

Which of the following retirement accounts does not require minimum distributions during the account holder's lifetime? *

Traditional IRA

Roth IRA

SEP IRA

401(k)

What is the primary advantage of contributing to a Health Savings Account (HSA) for retirement healthcare expenses? *

Tax-free withdrawals for any expense after 65

Triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses

Employer matching contributions are mandatory

Contributions are not limited by income

What happens if you miss taking your required minimum distribution (RMD) from a traditional IRA? *

You will face a 10% penalty

You will face a 50% penalty on the amount you should have withdrawn

You will owe ordinary income tax on the full account balance

You lose the ability to make further contributions

Which account is ideal for self-employed individuals who want to maximize retirement savings with high contribution limits? *

Roth IRA

SEP IRA

Simple IRA

Traditional IRA

What is the contribution limit for a 401(k) plan in 2024 (excluding catch-up contributions)? *

$18,000

$19,500

$22,500

$25,000

Which type of retirement plan is best for employees of small businesses, requiring employers to either match contributions or contribute 2% of salary? *

401(k)

Simple IRA

SEP IRA

Traditional IRA