Retirement Savings Quiz

What is a Traditional IRA?

• A type of savings account with no tax benefits

• A type of individual retirement account that allows pre-tax contributions

• A type of investment account with tax-free withdrawals

• A type of checking account with high interest rates

What is a Roth IRA?

• An individual retirement account that takes after-tax dollars and provides tax-free growth and withdrawals in retirement.

• A savings account that takes pre-tax dollars and provides tax-free growth.

• A checking account that takes after-tax dollars and provides tax-free withdrawals.

• A mutual fund that takes pre-tax dollars and provides tax-free growth.

At what age can you start withdrawing from your Roth IRA without paying federal taxes, provided the account has been open for at least five years?

• 55

• 59 1/2

• 62

• 65

Which type of IRA offers a tax deduction for contributions?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

In which type of IRA is tax owed on both earnings and contributions in retirement?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

Which type of IRA does not have required minimum distributions (RMDs) during your lifetime?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

Which type of IRA imposes a tax and 10% penalty on early distributions?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

Which type of IRA does not owe tax on contributions or earnings in retirement?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

Which type of IRA has no tax or penalty on early principal distributions, but imposes a tax and 10% penalty on early earnings distributions?

• Traditional IRA

• Roth IRA

• Both Traditional and Roth IRA

• Neither Traditional nor Roth IRA

When can you generally make tax- and penalty-free withdrawals from a Roth IRA?

• After age 55

• After age 59½

• After age 62

• After age 65