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Retirement Planning & Distribution Strategies Flashcards

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

Read the first 6 Retirement Planning & Distribution Strategies flashcards as text

  1. What is the maximum annual contribution limit for a Traditional IRA for taxpayers under age 50 in 2024?

    Answer: $7,000

    In 2024, the annual IRA contribution limit is $7,000 for individuals under age 50.

  2. Under the required minimum distribution (RMD) rules, at what age must a traditional IRA owner begin taking RMDs as of 2023?

    Answer: 73

    SECURE 2.0 Act raised the RMD starting age to 73 for individuals who reach age 72 after December 31, 2022.

  3. Which retirement account type allows tax-free qualified distributions in retirement and has no required minimum distributions during the owner's lifetime?

    Answer: Roth IRA

    Roth IRAs provide tax-free qualified distributions and do not impose RMDs on the original owner during their lifetime.

  4. What is the penalty for early withdrawal from a traditional IRA before age 59½, in addition to ordinary income taxes?

    Answer: 10%

    Early withdrawals from a traditional IRA before age 59½ are subject to a 10% additional tax penalty on top of ordinary income taxes.

  5. Which of the following is NOT a qualified exception to the 10% early withdrawal penalty from an IRA?

    Answer: Paying off credit card debt

    Paying off credit card debt is not a qualified exception to the early withdrawal penalty; exceptions are limited to specific IRS-approved hardship situations.

  6. What is the contribution limit for a 401(k) plan for employees under age 50 in 2024?

    Answer: $23,000

    The 401(k) employee contribution limit for 2024 is $23,000 for individuals under age 50.