AnswersPersonal FinanceBuilding a Smart Retirement Plan

Building a Smart Retirement Plan — Quiz Answers

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1
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What is employer match?

A
loan repayment
B
employer adds contributions to savings
C
government tax
D
employee pays employer
2
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What is a key feature of a Roth IRA?

A
no contribution limits
B
taxes are paid later
C
withdrawals are always taxed
D
contributions are made after taxes
3

Which account allows tax-free withdrawals in retirement if qualified?

A
savings account
B
401(k) only
C
Traditional IRA
D
Roth IRA
4

What is a Traditional IRA?

A
an account with tax-deferred contributions
B
a checking account
C
a loan account
D
an account with tax-free withdrawals
5

A tax-deferred account means taxes are paid ______.

A
later at withdrawal
B
never
C
annually
D
immediately
6

Why is diversification important in retirement planning?

A
spreads income sources
B
reduces taxes
C
eliminates saving
D
increases risk
7

Why is Social Security not enough alone?

A
replaces all income
B
has no payments
C
eliminates savings
D
covers only part of expenses
8

What is a key advantage of employer-sponsored plans?

A
no investment risk
B
no taxes ever
C
unlimited withdrawals
D
employer matching contributions
10

Which is a primary source of retirement income?

A
Social Security
B
wages
C
tips
D
bonuses

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