#4 Understanding Investment Accounts

What type of account is necessary to hold investments like index funds?

• Loan account

• Brokerage account

• Savings account

• Checking account

Which account is known for its tax advantages on investment growth for retirement?

• Taxable brokerage account

• Traditional IRA

• Roth IRA

• 401k

What can a Roth IRA hold?

• Real estate

• Only cash

• Only stocks

• Index funds, stocks, and bonds

What is the primary benefit of investing in a Roth IRA?

• Investment growth is not taxed

• Unlimited contributions

• No early withdrawal penalties

• Immediate tax benefits

Why doesn't it make sense to compare a Roth IRA to an index fund?

• Roth IRAs only hold cash

• Index funds can't be held in a Roth IRA

• They operate at different layers of investing

• They are the same type of investment

What goes inside of a fund?

• A brokerage account

• Stocks

• Bonds only

• A savings account

Where does an IRA account need to be opened?

• In a mutual fund

• At a credit union

• At a brokerage

• At a bank

What analogy is used to explain the necessity of both a Roth IRA and an index fund?

• A key and a lock

• A car and fuel

• A book and a library

• A shoe and a sock

401(k), IRA, and Roth IRA are all examples of a __________ account.

• Retirement

• College Savings

• Low Interest

• Stock