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1.
Who might be eligible to participate in a SIMPLE?
The checkout boy at Bob's Corner Bakery. Only companies with 100 or fewer employees can participate in a SIMPLE plan.
2.
If you are not covered by a qualified retirement plan at work, your IRA contributions can be tax-deductible.
True. Your IRA contributions can be tax-deductible if you meet income requirements.
3.
As a general rule, the _______ you invest your money, the _______ that tax deferral can work for you.
Earlier / More. Tax deferral benefits greatly the earlier you start investing.
4.
Annuities don't offer the same tax protection as 401(k) plans.
True. While annuities are tax-deferred, there is no tax protection on the income you invest in them–unlike in 401(k) plans.
5.
Which is not true of traditional 401(k) plans?
Your earnings are never taxed. In traditional 401(k) plans, your earnings are subject to taxes when you withdraw them.
6.
You can contribute to a Keogh plan ______.
If you are self-employed. Employees of incorporated businesses are not eligible for Keogh plans.
7.
An advantage of keeping money in a tax-deferred retirement plan is that you might pay lower taxes on the money when you eventually take it out. This is because _______.
You may be in a lower tax bracket in retirement. Most retirees take in less income in retirement, which typically puts them into a lower tax bracket. This is not a given for everyone, though.