401K and IRA Quiz

What is one of the main benefits of a traditional 401K?

• It lowers your taxable income.

• It requires no minimum age for withdrawals.

• It provides immediate tax-free withdrawals.

• It offers unlimited contribution limits.

At what age can you withdraw from a 401K without incurring a penalty?

• 65 years old

• 55 years old

• 60 years old

• 59 and a half.

What is the maximum contribution limit for a traditional 401K for individuals under 50 in 2023?

• $25,000

• $19,500

• $22,500

• $20,500

Which type of fund is recommended for investment within a 401K due to its diversification?

• Sector-specific funds

• Bond funds

• Index funds

• Money market funds

What is a key difference between a traditional IRA and a 401K?

• A traditional IRA does not require an employer.

• A traditional IRA offers employer matching contributions.

• A traditional IRA has higher contribution limits.

• A traditional IRA allows for tax-free withdrawals at any age.

What is the contribution limit for a traditional IRA in 2024 for individuals under the age of 50?

• $7,500

• $7,000

• $88,000

• $6,500

When were Roth accounts created?

• 1997

• 1985

• 2000

• 1990

What is the main tax benefit of a Roth 401K?

• No taxes on contributions

• Lower taxable income

• Contributions are tax-deductible

• Earnings are tax-free upon withdrawal

What is the 5-year rule for a Roth IRA?

• You can only contribute for 5 years

• You must withdraw all funds within 5 years

• You must wait 5 years after your first contribution to withdraw money tax-free

• You must wait 5 years to make any contributions

What is the income limit for contributing to a Roth IRA for single individuals in 2024?

• $100,000

• $200,000

• $120,000

• $146,000