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Portfolios 204: Primer to Individual Retirement Accounts

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1.
In a _______ individual retirement account, the money you contribute to it has already been taxed.
Choose wisely. There is only one correct answer.
Roth. Your contributions come out of your net pay, meaning they have already been taxed.
2.
You can generally have both a Roth and a traditional IRA.
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True. However, you will be penalized if you exceed the yearly contribution limit.
3.
What is the name for the party that holds funds you contribute to your IRA?
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Custodian. When holding funds, the party is referred to as a custodian.
4.
Capital gains on Roth IRAs are _________.
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Tax-free. As long as you meet the age and waiting-time requirements, dividends and capital gains are tax-free.
5.
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.