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1.
The party that holds funds you contribute to your IRA is called the collection agent.
False. It is called the custodian.
2.
Two criteria must be met for withdrawals of earnings from a Roth IRA to be tax-free: the individual must be at least 59½, and the funds must have been in the account for at least _______ years.
Five. Five years is the minimum length of time.
3.
Steve just recently rolled his Roth IRA from his savings account to a modestly performing bond mutual fund. But now he has discovered what an excellent performer the "Internet Sky's-the-Limit Fund" is. He may roll his IRA into that fund this very week.
False. He may do a rollover only once per year, and that applies to all of his IRAs together.
4.
Your ability to contribute to a Roth IRA is affected by how much money you earn.
True. After you have earned a certain amount, your ability to contribute to a Roth IRA becomes limited and eventually stops. The limit varies based on your tax filing status.
5.
For which of the following situations would the 10 percent early withdrawal penalty apply to Roth IRA earnings withdrawals?
Purchase of a new car. The Roth IRA does not allow this.