Choose wisely. There is only one correct answer to each question.
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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 still contributing to your IRA plan when you are 76 years old, you must therefore have _______.
Either of the above. Roth IRAs do not compel you to stop making contributions at age 73, and due to recent tax law changes, neither do traditional IRAs.
3.
An ordinary savings account offers no tax protection for retirement savings.
True. You must pay tax on both the income you earn before depositing into a savings account and on the interest your deposits earn.
4.
What is the maximum percentage of your income that you can contribute to a Keogh plan?
100%. You can contribute up to 100%, up to a yearly dollar maximum.
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.
Who may sell an annuity?
An insurance agent. An annuity is an insurance contract offered by licensed insurance agents.
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.