Chp 3 Multiple Choice

Question 1

The _____ IRA grows tax free

Roth
Traditional
Original
Life insurance

Answer 1

Roth

Question 2

An educational savings account (ESA) is used for______

Retirement
College
An emergency fund
A new car

Answer 2

College

Question 3

Which of the following is not a retirement plan

Answer 3

529

Question 4

Which is not a benefit of the Roth IRA

1) Grows tax free
2) Unlimited contributions
3) Provides penalty free withdrawals under certain circumstances
4) more choices

Answer 4

Unlimited contributions

Question 5

If your company provides a 100% match up to 6%, how much should you personally contribute to your 401 k if you earn $35,000 (not including the money the company contributed)?

$1,750
$2,100
$3,500
$5,250

Answer 5

$2,100

Question 6

If you contribute $2,000 to your 401 k and your company matches up to 3%, how much is in the account?

Answer 6

$4,600

Question 7

What should you do with your retirement accounts when you leave a company

Cash them out
Fund deposit
Fund shift
Direct transfer

Answer 7

Direct transfer

Question 8

Never save for college using:

Pre tax dollars
Pre paid tuition
Savings bond
Both pre paid tuition and savings bond

Answer 8

Both

Question 9

Baby step 5 is

Answer 9

College funding

Question 10

If Carol and Joe are dept free, how much should they be investing in retirement plans if their combined income is $145,000

$14,500
$21,000
$21,750
$43,500

Answer 10

21,750