RIA Retirement Planning

Question 1

A Traditional IRA contribution may be tax-deductible depending on:

Accepted Answer

Whether the investor or spouse has access to a workplace retirement plan and their income level

Answer

Traditional IRA deductibility phases out for those covered by workplace retirement plans above certain income thresholds.

Question 2

The primary advantage of a Roth IRA over a Traditional IRA is:

Accepted Answer

Tax-free growth and tax-free qualified withdrawals in retirement

Answer

Roth IRA contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free.

Question 3

Required Minimum Distributions (RMDs) from Traditional IRAs must begin by:

Accepted Answer

April 1 of the year following the year the account holder turns 73

Answer

Under SECURE Act 2.0, RMDs must begin by April 1 following the year an account holder turns 73.

Question 4

A 401(k) plan offers which key tax advantage?

Accepted Answer

Pre-tax contributions reduce current taxable income, with taxes deferred until withdrawal

Answer

Traditional 401(k) contributions are made pre-tax, reducing current taxable income with taxes deferred until retirement withdrawal.

Question 5

The 'stretch IRA' strategy was largely eliminated by:

Accepted Answer

The SECURE Act of 2019

Answer

The SECURE Act (2019) eliminated the stretch IRA for most non-spouse beneficiaries, requiring inherited IRA distributions within 10 years.

(RIA) Registered Investment Advisor Practice Test