Test your knowledge

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The party that holds funds you contribute to your IRA is called the collection agent.

Choose wisely. There is only one correct answer.

True

False

False. It is called the custodian.

You _______ take a tax deduction on the contributions you make to your Roth IRA.

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Can

Cannot

Neither

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.

If you are unmarried and you earn no money at all from work this year, how much can you contribute to an individual retirement account for this year?

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Nothing

The full allowable amount

The amount you would have been able to contribute last year

An amount between $0 and the full allowable amount

Nothing. If you are unmarried, you must have earned income in order to contribute.

In a _______ individual retirement account, the money you contribute to it has already been taxed.

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Traditional

Roth

Neither

Roth. Your contributions come out of your net pay, meaning they have already been taxed.

A collection of valuable, vintage, handmade Elvis memorabilia is allowed as an IRA investment.

Choose wisely. There is only one correct answer.

True

False

False. Collectibles are not allowed as IRA investments.

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