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1.
Distributions from a 401(k) plan are allowed for all of the following except _______.
First-time home purchase. Distributions are not allowed for a first-time home purchase.
2.
If an employee defers 8 percent of his or her wages into a 401(k) plan, and the employer contributes an additional 3 percent, the employer is making a matching contribution.
True. The employer is making a matching contribution.
3.
In a SIMPLE 401(k) plan, the employer may make either matching or non-matching contributions.
True. The employer is allowed to choose an option.
4.
If your employer matches your contributions to your Roth 401(k), those employer contributions are _______.
Pre-tax. Despite the Roth 401(k)'s purpose, these matches are actually pre-tax; but when you withdraw them, they will be taxed.
5.
There are situations in which a 401(k) rollover may result in you having to pay taxes.
True. If you don't roll over all of it, or if you don't place the funds into the new account within 60 days, you can be taxed on the amount that is not rolled over.
6.
If you do a 401(k) rollover by removing and depositing the money yourself, you will be required to withhold some of the funds for taxes.
True. You must withhold 20% for taxes.
7.
Assume that Mary earns $200,000 this year and defers $10,000 into her 401(k) plan. How much is her employer required to match?
$0. Employers are not required to match contributions.