Series 66: Exercise

Exercise

Answer true or false

1. 1. True or false. Both the traditional IRA and the Roth IRA allow contributions of after-tax dollars.
2. 2. True or false. An employee is limited in the amount he may contribute to a traditional IRA if he has another retirement plan account.
3. 3. True or false. Traditional and Roth IRAs have similar limits on contributions and required minimum distributions
4. 4. True or false. If an individual sets up a Roth IRA account at the age of 60, and withdraws earnings at the age of 62, he will not be charged a tax penalty on the withdrawal.
5. 5. True or false. A working person can contribute to her non-working spouse’s IRA, as long as the couple files a joint return and the working spouse has enough earned income to cover both IRA contributions.

Answers

1. 1. True. The traditional IRA provides tax benefits, so it is in the participant’s best interest to maximize before-tax contributions to that account. Any after-tax contributions can be withdrawn from the traditional IRA tax-free, but the individual must show evidence that taxes were paid on thes