FinanceRetirement Plan Taxation
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Retirement Plan Taxation Quiz

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#1

Which of the following retirement plans allows for tax-deferred growth of contributions?

401(k)
Explanation

Tax-deferred growth of contributions.

#2

What is the penalty for early withdrawal from a 401(k) before age 59½?

10% penalty plus taxes
Explanation

Withdrawal incurs a 10% penalty plus taxes.

#3

Which of the following retirement plans allows for penalty-free withdrawals for certain qualifying expenses, such as first-time home purchase or higher education?

Roth IRA
Explanation

Penalty-free withdrawals for qualifying expenses.

#4

What is the age at which individuals can make 'catch-up' contributions to their IRA accounts?

50
Explanation

Age for catch-up contributions is 50.

#5

Which retirement plan allows for penalty-free withdrawals for certain medical expenses?

Roth IRA
Explanation

Penalty-free withdrawals for medical expenses.

#6

What happens if you withdraw funds from a traditional IRA before age 59½?

10% penalty plus taxes
Explanation

Withdrawal incurs a 10% penalty plus taxes.

#7

In which of the following retirement plans are contributions made with after-tax dollars?

Roth IRA
Explanation

Contributions made with after-tax dollars.

#8

Which retirement plan allows for catch-up contributions for individuals aged 50 and older?

401(k)
Explanation

Catch-up contributions allowed for ages 50 and older.

#9

What is the maximum contribution limit for a Traditional IRA in 2024?

$7,000
Explanation

Maximum contribution limit is $7,000.

#10

What is the maximum contribution limit for a 401(k) plan in 2024?

$19,500
Explanation

Maximum contribution limit is $19,500.

#11

Which of the following retirement plans is typically offered by government and certain non-profit organizations?

403(b)
Explanation

Offered by government and certain non-profits.

#12

Which retirement plan is specifically designed for public school and non-profit employees?

457(b)
Explanation

Designed for public school and non-profit employees.

#13

What is the penalty for failing to take required minimum distributions (RMDs) from a traditional IRA or 401(k) after age 72?

5% penalty on the amount not distributed
Explanation

5% penalty on undistributed amount.

#14

Which of the following retirement plans has no income limits for contributions?

SEP IRA
Explanation

No income limits for contributions.

#15

At what age must individuals begin taking required minimum distributions (RMDs) from their retirement accounts?

72
Explanation

RMDs must begin at age 72.

#16

Which of the following retirement plans is designed primarily for self-employed individuals and small business owners?

SEP IRA
Explanation

Designed for self-employed and small business owners.

#17

What is the penalty for excess contributions to an IRA (above the annual limit)?

5% penalty on the excess amount
Explanation

5% penalty on excess contributions.

#18

Which retirement plan allows for contributions made by both employers and employees?

401(k)
Explanation

Allows contributions from employers and employees.

#19

Which retirement plan is subject to required minimum distributions (RMDs) starting at age 72?

Traditional IRA
Explanation

RMDs start at age 72 for Traditional IRA.

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