Retirement Plans

What is a 401k Plans?

• government retirement plan which is tax deferred

• individual retirement plan to which you & your employer contribute

• teacher retirement plan & defined contribution plan

• tax deferred savings plan & defined contribution plan

True/False: In a 401k, only the employer contributes to the plan for the employee.

• True

• False

When are taxes paid on a 401k?

• when the employee turns 65

• upon deposit of the money

• upon withdrawal of funds

• taxes aren't paid on a 401k

What is an IRA?

• Individual Retirement Plan

• Incentive Retirement Account

• Individual Retirement Account

• Individual Replacement Access

Why is it important to save for retirement?

• so that you'll have enough money to live on in your old age

• because Social Security may not exist when you retire

• if social security exists when you retire, it probably won't be enough money to live on

• so you can travel & buy the newest smartphone every 2 years

• all of the above

What is the penalty if you withdraw money from your retirement account early?

• you will have to repay it plus double the interest

• you will lose all the interest you've earned on it

• you lose eligibility for that account

• the money you withdraw will be taxed as income and you will pay a penalty

Average retirement last _______ years

• 18 years

• 20 years

• 10 years

• 30 years

What is a retirement plan?

• A savings account for emergencies

• A financial strategy for post-employment life

• A type of insurance policy

• A government tax

Which of the following is a common type of retirement plan in the United States?

• 401(k)

• 529 Plan

• Health Savings Account

• Roth IRA

What is the primary purpose of a retirement plan?

• To fund a child's education

• To provide income after retirement

• To pay off debts

• To buy a house