#1
Which of the following is a tax-advantaged retirement account?
IRA (Individual Retirement Account)
ExplanationTax-advantaged retirement account.
#2
What is the penalty for early withdrawal from a traditional IRA or 401(k) before the age of 59½?
10%
ExplanationPenalty for early withdrawal from traditional IRA or 401(k) before age 59½.
#3
In a 401(k) plan, what is the purpose of the vesting period?
Governs the ownership of employer-contributed funds over time
ExplanationVesting period governs ownership of employer-contributed funds over time.
#4
What is the penalty for failing to take the required minimum distribution (RMD) from a retirement account?
50%
ExplanationPenalty for failing to take required minimum distribution (RMD) from retirement account.
#5
In a 401(k) plan, what is the significance of the 'catch-up' contribution provision?
Enables employees over 50 to contribute additional funds
ExplanationCatch-up provision enables employees over 50 to contribute additional funds to 401(k) plan.
#6
What is the maximum annual contribution limit for a 401(k) plan in 2022?
$19,500
ExplanationMaximum annual contribution limit for 401(k) plan in 2022.
#7
Which retirement account allows for tax-free withdrawals if certain conditions are met?
Roth IRA
ExplanationTax-free withdrawals with certain conditions.
#8
What is the catch-up contribution limit for individuals aged 50 and older in a 401(k) plan in 2022?
$6,000
ExplanationCatch-up contribution limit for individuals aged 50 and older in 2022.
#9
Which tax-advantaged retirement account has required minimum distributions (RMDs) starting at age 72 (or 70½ if born before July 1, 1949)?
Traditional IRA
ExplanationTax-advantaged retirement account with required minimum distributions.
#10
Which of the following retirement accounts is specifically designed for self-employed individuals or small business owners?
SIMPLE IRA
ExplanationRetirement account designed for self-employed individuals or small business owners.
#11
At what age can an individual start making penalty-free withdrawals from their IRA or 401(k) accounts?
59½
ExplanationAge for penalty-free withdrawals from IRA or 401(k) accounts.
#12
Which of the following is a characteristic of a Health Savings Account (HSA) in relation to retirement planning?
Withdrawals for qualified medical expenses are tax-free
ExplanationTax-free withdrawals for qualified medical expenses.
#13
What is the primary benefit of a 403(b) plan compared to a 401(k) plan?
Designed for nonprofit organizations and educational institutions
Explanation403(b) plan designed for nonprofit organizations and educational institutions.
#14
Which retirement account allows for penalty-free withdrawals for first-time homebuyers (up to a certain limit)?
Roth IRA
ExplanationPenalty-free withdrawals for first-time homebuyers (up to limit).
#15
Which tax-advantaged retirement account is funded with after-tax dollars but allows tax-free withdrawals in retirement?
Roth IRA
ExplanationTax-advantaged retirement account funded with after-tax dollars.