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AFK Retirement Planning Flashcards

6 cards from real AFK practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 AFK Retirement Planning flashcards as text

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

    Answer: $7,000

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

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

    Answer: 73

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

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

    Answer: Roth IRA

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

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

    Answer: $7,500

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

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

    Answer: Years of service and salary history

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

  6. What penalty applies to early withdrawals from a traditional IRA before age 59½, absent an exception?

    Answer: 10%

    Early withdrawals from a traditional IRA before age 59½ are subject to a 10% early withdrawal penalty in addition to ordinary income tax.

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