Retirement Planning for Financial Advisors Flashcards
6 cards from real Financial Advisor 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 for Financial Advisors flashcards as text
For 2024, what is the maximum employee elective deferral contribution limit for a 401(k) plan?
Answer: $23,000
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.
At what age must traditional IRA account holders begin taking Required Minimum Distributions (RMDs)?
Answer: 73
Under the SECURE 2.0 Act, the RMD starting age was raised to 73 for individuals who turn 72 after December 31, 2022.
A Roth IRA conversion requires the converted amount to be:
Answer: Included in ordinary income in the year of conversion
The amount converted from a traditional IRA to a Roth IRA is included in ordinary taxable income in the year of conversion.
Which type of employer retirement plan allows employees to make pre-tax contributions and employers to make matching or profit-sharing contributions?
Answer: 401(k) plan
A 401(k) plan allows employees to make pre-tax (or Roth after-tax) elective deferrals and enables employer matching or profit-sharing contributions.
What is the primary advantage of a Roth IRA over a traditional IRA for long-term retirement planning?
Answer: Tax-free qualified withdrawals in retirement
Roth IRA qualified withdrawals (after age 59½ and a 5-year holding period) are completely tax-free, including all investment growth.
Which retirement plan is most commonly used by self-employed individuals and allows the highest contribution limits?
Answer: Solo 401(k)
A Solo 401(k) allows self-employed individuals to contribute as both employee and employer, potentially contributing up to $69,000 (2024) plus catch-up, the highest limit available.