Which of the following retirement savings vehicles allows for tax-deferred growth?
Traditional IRA
Roth IRA
Savings account
Certificate of deposit (CD)
#2
Which retirement savings vehicle is designed to provide regular payments to the account holder upon retirement, often purchased from an insurance company?
401(k)
Roth IRA
Annuity
457(b)
#3
What is the contribution limit for a 401(k) plan in 2024?
$6,000
$19,500
$50,000
$100,000
#4
Which retirement savings vehicle is NOT subject to Required Minimum Distributions (RMDs) during the owner's lifetime?
Traditional IRA
Roth IRA
401(k)
Annuity
#5
What is a characteristic feature of a SEP-IRA (Simplified Employee Pension Individual Retirement Account)?
Contributions are made pre-tax
It is only available to self-employed individuals
Employers can contribute, but employees cannot
Contributions are mandatory
#6
Which of the following retirement savings vehicles is specifically designed for small businesses and self-employed individuals?
401(k)
Roth IRA
Solo 401(k)
457(b)
#7
What is the penalty for early withdrawal from a traditional IRA before age 59½?
10% penalty on the withdrawn amount plus income tax
No penalty, only income tax is applied
20% penalty on the withdrawn amount plus income tax
5% penalty on the withdrawn amount plus income tax
#8
What is a 'catch-up contribution'?
A contribution made by an employer on behalf of an employee
A contribution made to a retirement account by a financial advisor
Additional contributions allowed for individuals age 50 or older to boost their retirement savings
A contribution made to a Roth IRA after retirement
#9
What is a 'backdoor Roth IRA'?
A strategy to convert a traditional IRA to a Roth IRA by taking advantage of certain tax laws
An IRA opened by an individual who already has a Roth IRA
A type of Roth IRA only available to high-income earners
An IRA used exclusively for inheritance purposes
#10
In which retirement savings vehicle are contributions made with after-tax dollars, but withdrawals are tax-free during retirement?