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Portfolios 204: Primer to Individual Retirement Accounts

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1.
The party that holds funds you contribute to your IRA is called the collection agent.
Choose wisely. There is only one correct answer.
False. It is called the custodian.
2.
The traditional individual retirement account has all of the following characteristics except for ______.
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Contributions that are never tax-deductible. They can be if certain conditions are met. It is the Roth IRA whose contributions are never deducted from taxable income.
3.
The contributions you make to a traditional IRA may be eligible for tax deduction.
Choose wisely. There is only one correct answer.
True. There may be limits on how much is deductible, but the eligibility exists in traditional IRAs.
4.
You _______ take a tax deduction on the contributions you make to your Roth IRA.
Choose wisely. There is only one correct answer.
Cannot. You cannot take a tax deduction on your contributions, but when you withdraw the money for retirement, you also will not be taxed on that money.
5.
A collection of valuable, vintage, handmade Elvis memorabilia is allowed as an IRA investment.
Choose wisely. There is only one correct answer.
False. Collectibles are not allowed as IRA investments.