Retirement Pensions
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Questions and Answers

Which type of retirement account allows for tax-free withdrawals at retirement?

  • Roth IRA (correct)
  • Traditional IRA
  • 401(k)
  • 403b

    • What is the penalty for withdrawing funds from a traditional IRA before the age of 59.5?

  • 20% penalty
  • No penalty
  • 50% penalty
  • 10% penalty (correct)

    • Which retirement account type allows for contributions to be deducted from salary on a pre-tax basis?

  • 403b
  • SEP IRA
  • Roth IRA
  • 401(k) (correct)

    • What is the purpose of vesting in a 401(k) plan?

    <p>To determine the forfeiture of employer match funds</p> Signup and view all the answers

    Which of the following is a disadvantage of receiving monthly payments from a pension?

    <p>There would be no money left to pass on to your heirs</p> Signup and view all the answers

    What is the calculation used to determine the pension amount in the example provided?

    <p>2% for every year of service multiplied by the highest 5 years average salary</p> Signup and view all the answers

    What has happened to the number of companies offering pension plans from 1998 to 2015?

    <p>It has decreased by 90%</p> Signup and view all the answers

    Which of the following is a characteristic of a defined benefit plan?

    <p>It provides a fixed monthly payment in retirement</p> Signup and view all the answers

    What is the disadvantage of receiving monthly payments from a pension?

    <p>There would be no money left to pass on to heirs</p> Signup and view all the answers

    What has happened to the number of companies offering pension plans from 1998 to 2015?

    <p>It has decreased significantly</p> Signup and view all the answers

    Which type of retirement account allows for tax-free withdrawals at retirement?

    <p>Roth IRA</p> Signup and view all the answers

    What is the penalty for withdrawing funds from a traditional 401(k) before the age of 59.5?

    <p>10%</p> Signup and view all the answers

    Which retirement account type allows for contributions to be deducted from salary on a pre-tax basis?

    <p>403b</p> Signup and view all the answers

    What is the maximum employee contribution limit for a traditional 401(k) before the age of 50?

    <p>$19,000/year</p> Signup and view all the answers

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