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WorksheetsRetirement Accounts
Total questions: 30
Worksheet time: 30mins
Which of the below is an employer based retirement plan that both employees and employers contribute to?
Traditional IRA
Roth IRA
401K
Pension
Which of these accounts do you set up at a brokerage firm or other financial institution?
401K
Pension
Individual Retirement Account
What is the difference between a Traditional and Roth IRA?
A traditional IRA's contributions are not taxed until you withdraw them at retirement. A Roth IRA's your contributions are taxed when you invest.
A Roth IRA's contributions are not taxed until you withdraw them at retirement. A Traditional IRA your contributions are taxed when you invest them in.
What account is a good idea if you are in a lower tax bracket than you will be at retirement?
Traditional IRA
Roth IRA
Which type of account will your employer often "match" your contributions?
Traditional IRA
401K
Roth IRA
Pension
What does tax deferred mean?
You pay taxes when you put the money into the account and when you withdraw it.
You pay taxes now when you contribute to your account.
You pay taxes at a later date when the money is withdrawn.
The money put into this type of account has already had taxes taken out.
Pension
401K
Roth IRA
Traditional IRA
You should start saving for retirement
When you get married
When you get your first job
When you reach age 50
When you reach age 65
At what age can you start taking withdrawals from retirement accounts (401k, IRA, 403b) without penalties?
51.5
59.5
62.5
73
Which of the following is a supplemental retirement plan for government workers?
401k
403b
Roth IRA
Trad IRA
Which of the following retirement plans can you get a loan from yourself?
401k
457b
Roth IRA
Trad IRA
You are 53 and you need to pay for a surgery. It is $15,500. You take the money out of your Roth IRA. How much is the tax if you are in the 22% tax bracket?
Use the $ with no space in your answer. Example: $2500 .
if it is zero say $0.
(a)
What is a Roth IRA?
A retirement account where contributions are made with pre-tax income.
A type of savings account that offers high interest rates.
A retirement savings account that allows individuals to contribute after-tax income, meaning contributions are taxed upfront, but withdrawals during retirement are tax-free.
A government-sponsored investment plan for young adults.
What are the tax benefits of a Roth IRA?
Qualified withdrawals are tax-free, meaning you do not pay taxes on earnings or contributions when you withdraw them in retirement.
Contributions are tax-deductible in the year they are made.
All earnings are taxed at a lower rate than traditional IRAs.
You can withdraw contributions at any time without penalty, but earnings are taxed.
What happens to your IRA if you pass away?
Your IRA is automatically closed and the funds are lost.
Your IRA can be inherited by your beneficiaries, who may have different options for how to manage the account, including taking distributions.
Your IRA is transferred to the government as unclaimed property.
Your IRA must be liquidated immediately upon your death.
What is the difference between pre-tax and post-tax contributions?
Pre-tax contributions are made after income tax is deducted, allowing for tax-free withdrawals in retirement.
Post-tax contributions reduce taxable income in the year of contribution, while pre-tax contributions do not.
Pre-tax contributions are made before income tax is deducted, reducing taxable income in the year of contribution. Post-tax contributions are made after income tax is deducted, allowing for tax-free withdrawals in retirement.
Both pre-tax and post-tax contributions are made before income tax is deducted.
What does it mean for an employer to 'match' contributions in a 401(k)?
Employer matching means that an employer contributes additional funds to an employee's 401(k) account, typically matching a percentage of the employee's contributions up to a certain limit.
Employer matching refers to the employee contributing more than the employer to their 401(k) plan.
Employer matching is when the employer takes a percentage of the employee's salary for their own benefit.
Employer matching means that the employer will not contribute anything unless the employee reaches a certain salary threshold.
What was one of the main reasons for creating Social Security?
To support the banking system
To reduce poverty among senior citizens
To provide free healthcare
To fund the military
If you never paid into the social security system, you can never collect your own benefits.
True
False
Social security is designed to be your only source of income when you retire.
True
False
Politicians generally agree about what needs to be done to help the social security program.
True
False
What is the purpose of Social Security?
to protect the safety of our nation's harbors
to provide a trained military
to help Americans pay the bills when they can no longer work
to provide low cost healthcare
What is considered to be "retirement" age, when it is acceptable to begin taking IRA distributions without penalty?
50
59 1/2
65
70 1/2
What is NOT a reason you can take an early withdrawal from your IRA without penalty?
Down payment on your first home
To pay for higher education
To pay taxes owed to the IRS
To pay for unreimbursed medical expenses
At what age are you required to begin taking distributions from your Roth IRA?
65
59 1/2
70 1/2
Never
If you leave a company before the required minimum of years to retain your pension, what happens to the money?
You receive 1/2 of it when you leave the company
You receive 1/3 of it when you leave the company
You receive all of the money and can roll it into your new retirement plan
You don't receive any of the money
What type of employers usually offer pension plans for employees?
Government agencies
fast food restaurants
small start ups
private schools
What account is a good idea if you are in a lower tax bracket than you will be at retirement?
Traditional IRA
Roth IRA
Which of these accounts will NOT change if you switch jobs?
IRA
401K
Pension
Which of below accounts is your contribution directly taken out of your paycheck?
401K
IRA
