#1
Which of the following is a characteristic of a traditional Individual Retirement Account (IRA)?
Contributions are tax-deductible
ExplanationTax-deductible contributions.
#2
What is the main advantage of investing in a 401(k) plan?
Employer matching contributions
ExplanationBenefit from employer matching contributions.
#3
At what age can you start making penalty-free withdrawals from a traditional IRA?
59 1/2
ExplanationPenalty-free withdrawals start at 59 1/2.
#4
What is a characteristic of a Roth IRA?
Earnings grow tax-free
ExplanationEarnings in Roth IRA grow tax-free.
#5
Which investment option typically offers the highest potential return?
Stocks
ExplanationStocks offer the highest potential return.
#6
Which investment vehicle typically offers the highest level of risk?
Stocks
ExplanationStocks typically have the highest risk.
#7
What is a characteristic of a Health Savings Account (HSA) in relation to retirement planning?
Contributions are tax-deductible
ExplanationTax-deductible HSA contributions.
#8
Which investment vehicle typically offers the least liquidity?
Real estate investment
ExplanationReal estate investment has lower liquidity.