All tax-sheltered retirement plans

Assignment Help Financial Management

Reference no: EM131919520

1. If you plan and save adequately for retirement, which of the following is likely to provide the bulk of your retirement income needs?

a. Social Security

b. investment income from a tax-sheltered retirement plan

c. earnings from part-time employment

d. a pension from a prior employer

2. All tax-sheltered (qualified) retirement plans have, as a minimum, which of the following tax advantages?

a. All tax-sheltered (qualified) retirement plans have, as a minimum, which of the following tax advantages?

b. Taxes are applied against only the portion of any withdrawal that was taxable when deposited.

c. Withdrawals are not taxed if one has reached age fifty-nine and one-half.

d. Investment earnings (income and capital gains) from the funds invested in the plan are exempt from income taxation until withdrawn.

3. Using Monte Carlo analysis to predict the likelihood of meeting your investment goals is a way to enhance the use of

a. asset allocation.

b. market timing.

c. dollar-cost-averaging.

d. leverage.

4. Ronald is a 45-year-old pharmacist who is changing jobs. He has decided to personally accept a check from his $150,000 previous employer's retirement account and invest it into a rollover IRA within 60 days. In this case, the check will be for ______, and to avoid taxes and early withdrawal penalties he will need to deposit ______ in the rollover IRA.

a. $120,000; $120,000

b. $150,000; $150,000

c. $150,000; $120,000

d. $120,000; $150,000

5. Which of the following is not a type of defined-contribution retirement plan?

a. 401(k) plan

b. IRA plan

c. 403(b) plan

d. 457 plan

6. Simulations that allow you to estimate the probability of reaching your retirement savings goal at some point in the future are a benefit of

a. leverage.

b. market timing.

c. dollar-cost-averaging.

d. Monte Carlo analysis.

7. For workers covered by a defined-contribution retirement plan, the use of ____________ from an employer amounts to a tax-free increase in income during working years.

a. matching contributions

b. plan vesting

c. a cash-balance plan

d. a pension plan

8. Which type of IRA permanently exempts from income tax the investment returns earned while the funds are in the IRA?

a. a standard IRA with deductible deposits

b. a Roth IRA

c. a standard IRA with non-deductible deposits

d. No IRA has permanently exempt earnings

Reference no: EM131919520

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