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Portfolios 204: Primer to Individual Retirement Accounts

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1.
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.
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.
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.
4.
Which of the following may not be used to hold a Roth IRA?
Choose wisely. There is only one correct answer.
A collection of rare stamps. Collectibles are not allowed as Roth IRA investments.
5.
Which of the following may fund a Roth IRA?
Choose wisely. There is only one correct answer.
A bond that does not pay periodic interest. This is called a zero coupon bond, and it is allowed as an IRA investment. The others are not.