PFS Retirement Planning

Question 1

Which of the following accounts is commonly used for tax-deferred retirement savings?

Accepted Answer

Traditional IRA

Answer

Roth IRA

Answer

Brokerage Account

Answer

Savings Account

Question 2

At what age can individuals begin taking required minimum distributions (RMDs) from most retirement accounts?

Accepted Answer

73

Answer

59½

Answer

65

Answer

70½

Question 3

Which type of retirement plan is typically sponsored by employers and allows for employee salary deferrals?

Accepted Answer

401(k)

Answer

Roth IRA

Answer

SEP IRA

Answer

Defined Benefit Plan

Question 4

What is a key advantage of a Roth IRA in retirement planning?

Accepted Answer

Tax-free withdrawals

Answer

Tax-deductible contributions

Answer

Employer matching

Answer

Penalty-free early access

Question 5

Which retirement planning strategy helps mitigate longevity risk?

Accepted Answer

Purchasing an annuity

Answer

Investing in mutual funds

Answer

Buying real estate

Answer

Setting up a 529 plan

Question 6

What is the penalty for early withdrawal from a traditional IRA before age 59½ (excluding exceptions)?

Accepted Answer

10% penalty

Answer

No penalty

Answer

5% penalty

Answer

20% penalty