#1
Which of the following investment options is typically considered the least risky for retirement savings?
Bonds
ExplanationLeast risky investment option for retirement savings.
#2
Which of the following retirement plans is not subject to required minimum distributions (RMDs) during the account holder's lifetime?
Roth IRA
ExplanationRetirement plan exempt from RMDs during account holder's lifetime.
#3
What is the main advantage of investing in a target-date fund for retirement savings?
Automatic adjustment of asset allocation
ExplanationAdvantage of target-date funds in automatic asset allocation adjustment.
#4
Which of the following retirement plans allows for penalty-free withdrawals for first-time home purchases?
Roth IRA
ExplanationRetirement plan allowing penalty-free withdrawals for first-time home purchases.
#5
Which of the following retirement plans allows for penalty-free withdrawals for certain disaster-related expenses?
457(b)
ExplanationRetirement plan allowing penalty-free withdrawals for disaster-related expenses.
#6
Which of the following is a tax-advantaged retirement savings account in the United States?
All of the above
ExplanationTax advantages for retirement savings accounts in the US.
#7
What is the maximum contribution limit for an individual to a 401(k) plan in 2023?
$19,500
ExplanationMaximum contribution limit for 401(k) plan in 2023.
#8
Which of the following retirement plans allows contributions with post-tax income but offers tax-free withdrawals?
Roth IRA
ExplanationRetirement plan with post-tax contributions and tax-free withdrawals.
#9
What is the main advantage of a 403(b) plan over a 401(k) plan?
Availability to employees of public schools and certain tax-exempt organizations
ExplanationAdvantage of 403(b) plan over 401(k) for certain employees.
#10
At what age must individuals start taking required minimum distributions (RMDs) from their traditional IRAs?
70½
ExplanationAge requirement for starting RMDs from traditional IRAs.
#11
What is the penalty for early withdrawal from a 401(k) plan before the age of 59½ in the United States?
10% of the withdrawal amount
ExplanationPenalty for early withdrawal from a 401(k) plan in the US.
#12
What is the penalty for failing to make the required minimum distributions (RMDs) from a traditional IRA or 401(k) plan?
50% of the shortfall
ExplanationPenalty for not making required minimum distributions from retirement plans.
#13
Which of the following retirement plans is not subject to early withdrawal penalties?
Roth IRA
ExplanationRetirement plan exempt from early withdrawal penalties.
#14
What is the main advantage of a 457(b) plan over a 401(k) plan?
Ability to make withdrawals at any age
ExplanationAdvantage of 457(b) plan in allowing withdrawals at any age.
#15
What is the main advantage of a cash balance plan over a traditional pension plan?
Higher contribution limits
ExplanationAdvantage of cash balance plan over traditional pension plan in contribution limits.