RIA Retirement Planning 2

Question 1

The annual contribution limit for 401(k) plans applies to:

Accepted Answer

Employee elective deferrals (with separate limits for total including employer contributions)

Answer

The employee elective deferral limit is separate from the total annual additions limit that includes employer contributions.

Question 2

A defined benefit pension plan promises participants:

Accepted Answer

A specific monthly benefit at retirement based on a formula

Answer

Defined benefit plans promise a specific monthly retirement benefit, typically based on years of service and final salary.

Question 3

Social Security retirement benefits can be claimed as early as age:

Accepted Answer

62

Answer

Social Security retirement benefits can be claimed as early as age 62, but with a permanent reduction from the full retirement age benefit.

Question 4

Which retirement account type allows contributions after age 73 without RMD requirements?

Accepted Answer

Roth IRA

Answer

Roth IRAs have no RMD requirements during the account owner's lifetime, allowing continued contributions and growth.

Question 5

The 'rule of 55' allows employees to:

Accepted Answer

Withdraw from a 401(k) penalty-free at age 55 if they leave employment in or after the year they turn 55

Answer

The rule of 55 allows penalty-free 401(k) withdrawals for employees who separate from service in or after the year they turn 55.

(RIA) Registered Investment Advisor Practice Test