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1.
You may take money out of your retirement plan for any reason, at any time without IRS penalty, after you reach the age of _______.
59½. You may take penalty-free distributions from your retirement plan after you reach age 59½.
2.
Most retirement plans are tax-exempt.
False. Most retirement plans offer tax-deferred earnings. You do not pay taxes on the earnings until you withdraw funds from an account.
3.
To take best advantage of the tax rules, you usually should pay as much income tax as possible during your working years, so that you don't have to pay it later, during retirement.
False. You should deduct as much tax as possible during your working years, since you likely will be in a lower income bracket–and will be paying taxes at a lower rate–when you have retired.
4.
A defined benefit plan automatically builds the minimum required distribution into its payout options.
True. Defined benefit plans offer annuity payments that meet your minimum required distributions.
5.
If your retirement plan is an IRA, you may delay taking required minimum distributions until you retire.
False. If your plan is an IRA, you must begin taking minimum distributions by April 1 following the year you attain age 73, whether or not you are still employed.
6.
If you choose to annually recalculate your life expectancy, you generally will receive larger annuity payments.
False. If you choose to recalculate annually, you generally will receive smaller payments, because when you live another year, your life expectancy increases.