Retirement Rules Quiz

With a Roth IRA, at what age are you required to begin withdrawing money?

• At age 59 1/2

• At age 70 1/2

• When you begin receiving Social Security payments

• Never

Imagine you are 35 years old, you have put $15,000 in your Roth IRA over the past

three years, and you need to take money out for an emergency. How much can you

take out tax free without incurring a penalty?

• None because you are not 59.5 years of age

• $5,000

• $10,000

• $15,000

A retirement plan that allows you to withdraw the money that you originally put in at any

time regardless of age without incurring taxes or a tax penalty is:

• A 401(k) plan

• A Roth IRA

• A 403(b) plan

• A deductible IRA

What happens to the money in your retirement account if you re-marry and forget to

change the beneficiary before you die?

• It will go to your new spouse as long as you have designated him as you primary

  beneficiary in your will and/or trust.

• It will pass directly to your children unless you have named your new spouse in your

  will or trust as the primary beneficiary.

• It will go to the beneficiary named on the account, even if it is your ex-spouse.

• It will be divided equally between your new spouse and the named beneficiary.

What does the term "matching contribution" refer to?

• The percentage of your pay that you put into a workplace retirement plan.

• A contribution an employer makes to an employee's defined-contribution plan that is

  based on the employee's own contributions to the plan.

• A contribution an employer makes to an employee's retirement plan that is based on

  the length of time the employee has been with the company.

• An end-of-year bonus an employer makes to an employee's defined-benefit plan.

If your company offers both a traditional 401(k) and a Roth 401(k), what should you do?

• Split your money evenly between the two plans.

• Save the maximum allowed in the traditional 401(k) first and then begin contributing

  to the Roth 401(k).

• Opt for the traditional 401(k), since it offers greater flexibility and tax savings today.

• Opt for the Roth 401(k), since it offers more flexibility and greater tax savings in the

  future.

If you leave your job and you have a 401(k) plan with your old employer, you should:

• Leave it where it is as long as you have under $5000 in the plan and are

  comfortable with the investments

• Cash out the account and use the money to pay down credit card debt

• Have the money sent directly to you and then put that money in an IRA rollover

• Have the money transferred directly from your old plan custodian to a new IRA

  rollover custodian

What is Suze’s favorite retirement account?

• Traditional IRA

• Roth IRA

• Roth 401(k)

• SEP-IRA

What is the most important contributor to successful retirement planning?

• Time: the sooner you start the better

• The kind of retirement account that you use—i.e., tax free versus tax deferred

• A company match

• The professional you hire to manage your money

Which of the following accurately defines the term "compound growth"?

• A fee paid for the use of another person's money.

• A process in which interest is added both to the principal and to any interest already

  earned.

• A strategy whereby an investor seeks out stocks with strong growth potential.

• Growth measured in terms of inflation.