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1.
You may face tax penalties if you fail to take retirement plan distributions after your required retirement age.
True. If you fail to take money out of your plan after you have reached your required retirement age, you will face certain tax penalties.
2.
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.
3.
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.
4.
The amount of tax on an early withdrawal from a retirement plan is _______.
10 percent of the amount withdrawn. The tax penalty equals 10 percent of the amount withdrawn.
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.
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.