#1
What is Social Security?
A federal insurance program
ExplanationGovernment program providing income and services to seniors, disabled, and survivors.
#2
In a defined contribution retirement plan, who bears the investment risk?
Employee
ExplanationParty bearing investment risk in defined contribution plan.
#3
What does IRA stand for in the context of retirement savings?
Individual Retirement Account
ExplanationMeaning of IRA in retirement savings context.
#4
Which of the following is NOT a way to fund a retirement account?
Government subsidy
ExplanationNon-funding method for retirement accounts.
#5
What is the purpose of a pension plan?
To provide a source of income during retirement
ExplanationPurpose of pension plan.
#6
What is the maximum number of Social Security credits you can earn in a year?
16
ExplanationMaximum credits obtainable in a year for Social Security.
#7
At what age can you start collecting full Social Security retirement benefits in the United States?
67
ExplanationAge for full retirement benefits under Social Security.
#8
Which of the following is NOT a benefit provided by Social Security?
Healthcare benefits
ExplanationSocial Security doesn't provide healthcare benefits.
#9
Which of the following is NOT a characteristic of a defined benefit pension plan?
Benefit amount depends on investment returns
ExplanationDefined benefit pension plan characteristic.
#10
What is the penalty for early withdrawal from a 401(k) retirement account before the age of 59½ in the United States?
10%
ExplanationPenalty for early withdrawal from a 401(k) retirement account.
#11
What is the purpose of a 403(b) retirement plan?
For employees of public schools and certain tax-exempt organizations
ExplanationPurpose of 403(b) retirement plan.
#12
Which of the following retirement plans is specifically designed for self-employed individuals or small business owners?
SEP IRA
ExplanationRetirement plan tailored for self-employed or small business owners.
#13
What is the maximum number of credits you can earn per year toward Social Security eligibility in the United States?
16
ExplanationMaximum annual credits towards Social Security eligibility.
#14
What is the Full Retirement Age (FRA) for Social Security benefits for individuals born in 1960 or later in the United States?
67
ExplanationFull Retirement Age for Social Security benefits.
#15
At what age must individuals start taking Required Minimum Distributions (RMDs) from their traditional IRA accounts in the United States?
70½
ExplanationAge for starting Required Minimum Distributions (RMDs) from traditional IRA.
#16
In a Roth IRA, qualified distributions are tax-free. At what age can you make qualified distributions?
No age restriction
ExplanationAge limit for tax-free distributions in Roth IRA.
#17
What is the maximum annual contribution limit for traditional and Roth IRAs combined in the United States for individuals under the age of 50 in 2024?
$6,000
ExplanationCombined annual contribution limit for traditional and Roth IRAs.
#18
What is the maximum annual contribution limit for a 401(k) plan in the United States for individuals under the age of 50 in 2024?
$19,500
ExplanationMaximum annual contribution limit for under-50s in 401(k) plans.