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1.
The tax penalty for early withdrawal from your IRA account is 10 percent.
True. This penalty is meant to discourage you from taking out your money before the allowed time.
2.
The amount of your minimum required retirement distribution is based on your _______.
Life expectancy. The amount of your minimum distribution is based on your life expectancy as determined by IRS actuarial tables.
3.
If your income is below $32,000, your Social Security benefits will not be taxed.
False. It depends on your filing status. If your income is above $25,000 (single) and $32,000 (joint), your Social Security benefits can be taxed at 50 to 85 percent.
4.
Distributions you receive from ordinary qualified retirement and IRA accounts are taxed at what rate upon withdrawal?
Your regular income tax rate. Distributions are taxed at your regular income tax rate -- a fact that may call for some tax planning on your part.
5.
Which of the following is not true about a joint annuity?
It pays any estate taxes on the taxable amount. It is recommended that an insurance policy be used in conjunction with the annuity to cover taxes.