AFK AFK Retirement Planning

Question 1

What is the contribution limit for a traditional IRA for individuals under age 50 in 2024?

Accepted Answer

$7,000

Answer

The 2024 IRA contribution limit is $7,000 for individuals under age 50.

Question 2

At what age must required minimum distributions (RMDs) begin for traditional IRA holders under the SECURE 2.0 Act?

Accepted Answer

73

Answer

SECURE 2.0 Act raised the RMD starting age to 73 for individuals born between 1951 and 1959.

Question 3

Which type of retirement account allows qualified withdrawals to be taken tax-free in retirement?

Accepted Answer

Roth IRA

Answer

Roth IRA contributions are made with after-tax dollars, so qualified withdrawals in retirement are tax-free.

Question 4

What is the catch-up contribution amount for 401(k) plans for participants aged 50 and older in 2024?

Accepted Answer

$7,500

Answer

In 2024, participants aged 50 and older may make an additional catch-up contribution of $7,500 to a 401(k).

Question 5

A defined benefit pension plan promises retirees a benefit based primarily on which factor?

Accepted Answer

Years of service and salary history

Answer

Defined benefit plans calculate retirement income using a formula based on years of service and final or average salary.

AFK - Assessment of Fundamental Knowledge Practice Test