Strategy Intermediate: Avoiding Taxes at Retirement

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1.
To lower your minimum required retirement distribution, you can use only the joint life expectancy of you and your spouse.
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True. You can use only the joint life expectancy table for you and a spouse who is 10 or more years younger as beneficiary to lower your minimum required distribution.
2.
Going over the contribution limit in your retirement account will lead to a _______ tax penalty.
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6 percent. This penalty is meant to discourage overcontributing.
3.
Retirement plan balances left to a spouse are subject to a maximum 75 percent estate tax.
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False. Retirement plan balances left to a spouse qualify for a tax-free transfer.
4.
Retirement plan distributions are added to your overall taxable income.
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True. The IRS treats them as taxable income.
5.
Earned income includes retirement and Social Security benefits.
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False. The income you get from working is called earned income. Retirement and Social Security benefits are unearned income.