Retirement Account Quiz

Which type of retirement account remains unchanged in terms of eligibility if you switch jobs?

• Pension

• Traditional 401(k)

• Traditional IRA

• Roth IRA

For which type of retirement account is eligibility potentially affected by how long you work with a given company?

• Pension

• Traditional 401(k)

• Traditional IRA

• Roth IRA

Which retirement account has taxes already taken out of the money you put into it?

• Pension

• Traditional 401(k)

• Traditional IRA

• Roth IRA

When do you pay taxes on a Traditional IRA?

• When you put money into the account

• When you switch jobs

• When you eventually take the money out

• You do not pay taxes on a Traditional IRA

What is the nature of employer contributions to an employee's retirement plan?

• They are optional and vary by employer.

• They are mandatory for all employers.

• They are considered a taxable benefit to the employee.

• They must be matched by the employee.

What does having "some say" in how the money is invested imply when it comes to investment options for retirement?

• Your employer decides entirely on the investment without your input.

• You have no choice in how your contributions are invested.

• Your employer has some say in how the money is invested.

• The government decides how your retirement funds are invested.

What is a potential advantage of making contributions to a Roth IRA if you are just starting your career and your salary is low?

• You may be in a higher tax bracket at retirement.

• You can completely predict today's tax rates.

• You may be in a lower tax bracket now than at retirement.

• You have to pay taxes when you are in retirement.

Why might your friend Jomaine argue that a Traditional IRA or 401(k) has the best tax advantages?

• You have to pay taxes on your contributions now.

• You can wait until you retire to pay taxes.

• You can invest more money if it is post-tax.

• You are in a lower tax bracket now than you will be in retirement.

What does Sonia mean when she says pensions and 401(k)s are the best retirement options because they offer "free money"?

• You have to invest more of your own money.

• Your employer's contributions are a loan that must be repaid.

• Your employer may be contributing all or some of your 401(k) to match the money toward YOUR retirement.

• You cannot use the money until you reach the age of 70.