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1.
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.
2.
In the language of retirement plans, the term "pre-tax" means that _______.
Money contributed to the plan is not to be taxed in the current year (until withdrawn). "Pre-tax" means that it is meant to not be taxed currently.
3.
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.
4.
Once you contribute to a 401(k) plan, you must remain in the plan until you retire.
False. You can take the money out and put it into a different retirement account if you change jobs.
5.
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.
6.
Of the following, the retirement savings option that gives protection from taxes in the current year is ______.
Pre-tax/tax-deferred. With pre-tax, tax-deferred plans, you do not pay taxes on the income you contribute, and your earnings grow tax-free.
7.
A non-qualified annuity doesn't provide as much tax protection as a 401(k) plan because _______.
Contributions aren't pre-tax. There are no tax savings on the income you contribute to the annuity, even though the earnings are tax-deferred.