Retirement Accounts Quiz

Which type of retirement account remains unchanged even if you switch jobs?

• Pension

• Traditional 401(k)

• Traditional IRA

• Roth IRA

Which retirement account's eligibility may be affected by how long you work with a given company?

• Pension

• Traditional 401(k)

• Roth IRA

• Social Security

Which type of retirement account is offered by all employers?

• Pension

• Traditional 401(k)

• Traditional IRA

• Social Security

In which retirement account do you pay taxes when you eventually take the money out?

• Pension

• Traditional 401(k)

• Traditional IRA

• Roth IRA

Jenny says a Roth IRA is best because you pay taxes now and avoid them in retirement. Jomaine says a Traditional IRA or 401(k) is better because you pay taxes later. How might both be right?

• Roth IRA offers tax-free withdrawals in retirement, while Traditional IRA offers tax-deferred growth.

• Roth IRA and Traditional IRA both offer tax-free withdrawals.

• Roth IRA and 401(k) both require taxes to be paid upfront.

• Traditional IRA offers tax-free withdrawals in retirement, while Roth IRA offers tax-deferred growth.

Your friend Sonia says pensions and 401(k)s are the best retirement options because they offer you “free money.” What does she mean by this?

• Employers often match contributions to 401(k)s, which is like receiving free money.

• Pensions and 401(k)s do not require any contributions from employees.

• Pensions and 401(k)s are tax-free.

• Pensions and 401(k)s guarantee high returns.

Raheem is unsure how Social Security will factor into his retirement planning. How can Social Security impact his savings strategy, and why is it important to consider alongside accounts like IRAs and 401(k)?

• Social Security provides a guaranteed income, which can supplement savings from IRAs and 401(k)s.

• Social Security replaces the need for IRAs and 401(k)s entirely.

• Social Security is only available to those without IRAs and 401(k)s.

• Social Security offers higher returns than IRAs and 401(k)s.

What is a 401k?

• A retirement account set up through your employer.

• A savings account for emergencies.

• A tax-exempt fund for higher education.

• A piggy bank fund

Which of these accounts will NOT change if you switch jobs?

• Roth IRA

• 401K

What is the difference between a 401k and Roth IRA?

• A 401k's contributions are not taxed until you withdraw them at retirement. A Roth IRA's contributions have already been taxed

• A Roth IRA's contributions are not taxed until you withdraw them at retirement. A 401k's contributions are taxed when you invest them in.