Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Your 401(k) plan has a legal limit to how much you can contribute. However, some plans have a lower ceiling, which is based on _______.
A percentage of your salary. This is typically a low percentage that can still add up nicely.
2.
Your 401(k) plan's retirement planning tools will analyze _______.
All of the above. These are typical factors that a program will look at.
3.
When you choose from among your investment options as you set up your 401(k) plan, you should choose a little from each option.
False. As a rule, it is best to choose only those options that will help you reach your financial goal.
4.
What's the minimum amount you should try to invest in your 401(k) plan?
At least enough to get the employer match. Some people may not be able to contribute the maximum each year. But at least contribute enough to get the full employer match. That's free money.
5.
The 401(k) plan is a type of _______.
Defined contribution plan. The amount of money that 401(k) plan participants receive in retirement is based on the amount that they (and their employers) contribute to the plan, in addition to the investment returns they earn on those contributions. "Defined benefit" plans, such as pensions, generally pay a guaranteed sum based on wages and years of service.
