Navigating Retirement Plans: 401k, IRA, and More

The video provides an overview of various retirement plans, including 401k, IRA, Roth IRA, and SEP IRA. It explains the tax implications, contribution limits, and withdrawal rules for each type. The video also covers rollovers between accounts and special situations like first-time homebuyer withdrawals. The presenter shares personal opinions on the best retirement vehicles and offers practical advice for choosing the right plan.

What is the primary benefit of a traditional 401k plan?

• It offers flexible investment options.

• It reduces your taxable income.

• It provides immediate tax benefits on withdrawals.

• It allows unlimited contributions.

What is the penalty for early withdrawal from a traditional 401k?

• 5% penalty

• No penalty

• 10% penalty

• 15% penalty

What is the maximum contribution limit for a traditional 401k in 2020?

• $19,500

• $26,000

• $6,000

• $57,000

How are Roth 401k contributions taxed?

• Taxed at withdrawal

• Not taxed

• Post-tax

• Pre-tax

Which retirement account grows earnings tax-free?

• Traditional 401k

• Roth IRA

• Traditional IRA

• SEP IRA

What is the age requirement for mandatory withdrawals from a traditional 401k?

• 59 and a half

• 65

• 70 and a half

• 72

What is a unique feature of the 403 B plan?

• It has no contribution limits.

• It is self-directed.

• It allows higher contributions after 15 years of service.

• It is only for non-profit employees.

Who can set up a SEP IRA?

• All retirees

• Self-employed individuals

• Only non-profit employees

• Any employed individual

What happens if you roll over a traditional 401k to a Roth IRA?

• There is no tax implication.

• You increase the contribution limit.

• You must pay taxes on the rollover amount.

• You receive a tax rebate.

Can you withdraw your contributions from a Roth 401k at any time?

• Yes, but only after five years

• No, under no circumstances

• Yes, without any conditions

• Yes, but with a 10% penalty