IRA

What are the two main types of Individual Retirement Accounts (IRAs)?

• Traditional and Roth
• Traditional and 401(k)
• Roth and 403(b)
• SEP and SIMPLE

Which type of IRA offers tax-deductible contributions?

• Traditional IRA
• Roth IRA
• Both Traditional and Roth IRAs
• Neither Traditional nor Roth IRAs

Which type of IRA offers tax-free withdrawals during retirement?

• Traditional IRA
• Roth IRA
• Both Traditional and Roth IRAs
• Neither Traditional nor Roth IRAs

Which type of IRA does not have required minimum distributions (RMDs) during the account owner's lifetime?

• Traditional IRA
• Roth IRA
• Both Traditional and Roth IRAs
• Neither Traditional nor Roth IRAs

Which of the following is NOT a benefit of having an IRA?

• Tax Advantages
• Retirement Savings
• Limited Investment Choices
• Flexibility and Control

How can IRAs be used in estate planning?

• IRAs cannot be used in estate planning.
• By naming beneficiaries assets can be passed on to heirs with potential tax advantages.
• By converting the IRA to a 401(k) plan estate planning benefits can be maximized.
• IRAs can only be inherited by a spouse, not by non-spouse beneficiaries.

What is a commonly used guideline for retirement income replacement ratio?

• Aim for a retirement income replacement ratio of 50-60%.
• Aim for a retirement income replacement ratio of 70-80%.
• Aim for a retirement income replacement ratio of 90-100%.
• Aim for a retirement income replacement ratio of 100-110%.

What should be considered when estimating retirement needs?

• Healthcare costs
• Inflation
• Longevity
• All of the above

Which factor should be taken into account when planning for inflation?

• Inflation has no impact on retirement savings.
• Inflation reduces the purchasing power of money over time.
• Inflation increases the value of retirement savings.
• Inflation only affects healthcare costs.

What is the recommended action regarding reviewing and adjusting retirement plans?

• Regularly reviewing and adjusting retirement plans is not necessary.
• Retirement plans should only be reviewed and adjusted annually.
• Retirement plans should be reviewed and adjusted as circumstances change.
• Retirement plans should only be reviewed and adjusted once at the beginning of retirement