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Portfolios 204: Primer to Individual Retirement Accounts

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1.
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.
2.
You _______ take a tax deduction on the contributions you make to your Roth IRA.
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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.
3.
Which of the following is not allowed to fund an IRA?
Choose wisely. There is only one correct answer.
Cash value life insurance. Neither this nor collectibles are allowed as IRA investments.
4.
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.
5.
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.