RMI 330 Exam Review 3

Which retirement account grows tax-free and does not require withdrawals during the owner’s lifetime?

• Traditional IRA

• Roth IRA

• SEP IRA

• SIMPLE IRA

A 53-year-old individual with earned income can contribute how much to an IRA in 2026?

• $7,000

• $6,500

• $8,600

• $9,000

What is the latest date someone can make a prior-year IRA contribution?

• December 31 of that year

• April 15 of the following year

• March 31 of the following year

• October 15 of the following year

Which of the following income types would make someone ineligible to fund an IRA?

• Consulting income

• W-2 wages

• Rental income only

• Commissions

What’s the main advantage of a backdoor Roth strategy for high-income earners?

• It avoids RMDs while allowing Roth benefits

• It bypasses the income limits for Roth IRA contributions

• It avoids tax on conversions

• It reduces payroll taxes

An employer must include which workers in a SEP IRA plan?

• Any full-time worker with at least 3 months of service

• Employees age 21 with 3 of last 5 years of service and minimum $750 pay

• All part-timers

• Only management-level staff

What is the maximum an employer can contribute to an employee’s SEP IRA in 2026?

• $23,000

• Lesser of 15% or $50,000

• Lesser of 25% of pay or $72,000

• $60,000 flat limit

How are SIMPLE IRAs primarily designed for small businesses?

• They require complex IRS filings

• They’re inexpensive to administer and require minimal paperwork

• They allow unlimited participants

• They eliminate all employer contributions

What is the employer's basic contribution option in a SIMPLE IRA?

• 1% nonelective

• Either 3% match or 2% nonelective

• 5% match

• No contribution required

Early withdrawals from a SIMPLE IRA within two years trigger what penalty?

• 10%

• 15%

• 25%

• 5%