Advanced Financial Literacy Unit #6 Test Review Activity

Front

Multifaceted strategy using tax-advantaged investments and investment accounts to reduce an investor’s tax liability.

Back

Tax management

Front

Employee pension plans like those provided your teachers at Mansueto are examples of

Back

defined benefit plans.

Front

Each response below describes how Traditional IRAs differ from Roth IRAs EXCEPT:

1. earnings in Traditional IRAs are tax-deferred; in Roth IRAs, they are tax free.
2. Required Minimum Distribution ONLY applies to Traditional IRAs.
3. both allow for contributions to be deductible
4. both have contribution limitations.

Back

both allow for contributions to be deductible

Front

Which response BEST defines an annuity?

Back

A contract between a buyer and an insurance company that provides the buyer with a regular series of payments in return for a lump-sum contribution investment gain.

Front

Investment earnings grow tax-free and withdrawals are tax-free as well.

Back

Tax exempt

Front

Money being added to a qualified account.

Back

Contribution

Front

Money being withdrawn or taken out of a qualified account.

Back

Distribution

Front

___________allows employers to set aside money in retirement accounts for themselves and their employees.

Back

Simplified Employment Pension (SEP) Plans

Front

Which is NOT a tax-advantaged investment: U.S. Treasury Bond, Muni bonds, Tesla stock, Real estate?

Back

Tesla stock

Front

The process of composing tax returns, often income tax returns, often for a person other than the taxpayer

Back

Tax preparation