Retirement Savings and Plans Quiz

Test your knowledge on retirement planning with questions about 401(k), IRA, Roth IRA, 403(b), 457(b), and more. Know the advantages, penalties, and contribution limits.

#1

What is the primary advantage of contributing to a 401(k) retirement plan?

Tax-free withdrawals in retirement
Tax-deductible contributions
Immediate access to funds
No contribution limits
#2

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

$5,500
$6,000
$6,500
$7,000
#3

What is the concept of dollar-cost averaging in the context of retirement investing?

Investing a fixed amount at regular intervals, regardless of market conditions
Investing in high-risk assets
Withdrawing funds gradually during retirement
Investing only in individual stocks
#4

What is the primary purpose of a 457(b) retirement plan?

For self-employed individuals
For employees of non-profit organizations and government entities
For small business owners
For individuals aged 50 and older
#5

What is the penalty for failing to take the Required Minimum Distribution (RMD) from a retirement account?

5%
10%
15%
20%
#6

Which retirement plan allows self-employed individuals to contribute as both employer and employee?

IRA (Individual Retirement Account)
401(k)
SEP IRA (Simplified Employee Pension)
Roth IRA
#7

What is the penalty for early withdrawal from a traditional IRA before the age of 59½?

10%
5%
15%
20%
#8

Which of the following retirement plans allows for catch-up contributions for individuals aged 50 and older?

401(k)
Roth IRA
403(b)
All of the above
#9

What is the primary advantage of a Roth IRA over a Traditional IRA?

Tax-deductible contributions
Tax-free withdrawals in retirement
Higher contribution limits
No age limit for contributions
#10

In a 403(b) retirement plan, which type of employer is eligible to sponsor the plan?

For-profit corporations
Government entities and certain non-profit organizations
Self-employed individuals
Individuals aged 50 and older
#11

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

5%
10%
15%
20%
#12

Which of the following retirement plans does not have required minimum distributions (RMDs) during the account owner's lifetime?

401(k)
Roth IRA
Traditional IRA
403(b)
#13

In the context of retirement savings, what does the term 'annuitization' refer to?

The process of converting assets into a series of periodic payments
Investing in high-risk assets
Early withdrawal of funds
Contributing to a health savings account (HSA)
#14

What is the penalty for excess contributions to an IRA that are not corrected before the tax filing deadline?

10% penalty on the excess amount
20% penalty on the excess amount
5% penalty on the excess amount
No penalty
#15

Which retirement plan is specifically designed for nonprofit organizations and public schools?

401(k)
403(b)
SEP IRA (Simplified Employee Pension)
Roth IRA
#16

Which of the following retirement plans is known for allowing both pre-tax and after-tax (Roth) contributions?

401(k)
Traditional IRA
Roth IRA
SEP IRA (Simplified Employee Pension)
#17

What is the 'Rule of 72' in the context of retirement planning?

The age at which required minimum distributions (RMDs) must begin
A formula to estimate the number of years it takes for an investment to double in value
The maximum contribution limit for IRAs
A tax credit for retirement contributions

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