Individual Retirement Accounts (IRAs) and Retirement Planning Quiz

Test your knowledge on IRAs and retirement planning. Understand tax benefits, contribution limits, and withdrawal rules.

Practice Learn Test

Which of the following is a tax-advantaged retirement account?

Traditional IRA

Savings account

Checking account

Brokerage account

Which of the following is NOT a benefit of contributing to an IRA?

Tax deduction

Tax-deferred growth

Tax-free withdrawals

High liquidity

What is the maximum contribution limit for a Traditional IRA in 2023 (for individuals under 50 years old)?

$5,500

$6,000

$6,500

$7,000

Which of the following is NOT a penalty-free withdrawal from a Traditional IRA before age 59½?

Higher education expenses

First-time home purchase

Medical expenses exceeding 7.5% of adjusted gross income

Vacation expenses

What is the primary difference between a Traditional IRA and a Roth IRA?

Tax treatment of contributions

Maximum contribution limit

Eligibility requirements

Investment options

Which of the following is TRUE about Roth IRA withdrawals?

Contributions are always tax-free

Earnings are always tax-free

Both contributions and earnings are always tax-free

Withdrawals are always subject to penalties

At what age can you start making penalty-free withdrawals from a Traditional IRA?

59½

What is the 'catch-up' contribution limit for individuals aged 50 and older for a Traditional IRA in 2023?

$1,000

$2,000

$3,000

$4,000

What is the penalty for failing to take required minimum distributions (RMDs) from a Traditional IRA once you reach the age of 72?

10% of the RMD amount

20% of the RMD amount

30% of the RMD amount

50% of the RMD amount

#10

What happens if you contribute more than the allowable limit to your IRA in a given tax year?

The excess contribution is taxed at a lower rate

The excess contribution is returned to you without penalty

The excess contribution is taxed and subject to a 6% penalty

The excess contribution is automatically transferred to a Roth IRA

#11

Which of the following individuals is NOT eligible to contribute to a Roth IRA?

A single individual with a modified adjusted gross income of $140,000

A married couple filing jointly with a modified adjusted gross income of $200,000

A married individual filing separately with a modified adjusted gross income of $10,000

A single individual with a modified adjusted gross income of $130,000

#12

What is the penalty for early withdrawal (before age 59½) from a Roth IRA on earnings?

10% penalty

15% penalty

20% penalty

There is no penalty on earnings if certain conditions are met