Financial Advisor Retirement Planning for Financial Advisors

Question 1

For 2024, what is the maximum employee elective deferral contribution limit for a 401(k) plan?

Accepted Answer

$23,000

Answer

For 2024, employees can defer up to $23,000 into a 401(k) plan, with an additional $7,500 catch-up contribution allowed for those aged 50 and older.

Question 2

At what age must traditional IRA account holders begin taking Required Minimum Distributions (RMDs)?

Accepted Answer

73

Answer

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

Question 3

A Roth IRA conversion requires the converted amount to be:

Accepted Answer

Included in ordinary income in the year of conversion

Answer

The amount converted from a traditional IRA to a Roth IRA is included in ordinary taxable income in the year of conversion.

Question 4

Which type of employer retirement plan allows employees to make pre-tax contributions and employers to make matching or profit-sharing contributions?

Accepted Answer

401(k) plan

Answer

A 401(k) plan allows employees to make pre-tax (or Roth after-tax) elective deferrals and enables employer matching or profit-sharing contributions.

Question 5

What is the primary advantage of a Roth IRA over a traditional IRA for long-term retirement planning?

Accepted Answer

Tax-free qualified withdrawals in retirement

Answer

Roth IRA qualified withdrawals (after age 59½ and a 5-year holding period) are completely tax-free, including all investment growth.

Financial Advisor Practice Test