You may have your own Roth IRA, but how well do you know the rules?
A Roth IRA is a tax-qualified retirement account that doesn’t net you a nickel in tax deductions when you put money into it. But it grows tax free and, if you play your cards right, you can build up a stash of serious no-strings-attached dough by retirement. After years of being overlooked by mainstream retirement savers, Roth IRAs have finally come into their own. Let’s see how much you know with this simple quiz – no Googling!
- _____ You can write off a loss on a Roth IRA.
- _____ The maximum you can put into a personal Roth in 2017 is $5,500/yr ($6,500 if you’re age 50+).
- _____ You can remove original contributions you made to your personal Roth IRA with no tax or penalty at any time.
- _____ Roth IRAs can be opened by minors.
- _____ You cannot contribute to both a Roth and a Traditional IRA (TIRA) in the same year.
- _____ A nonworking spouse can contribute to a Roth IRA.
- _____ You can get a tax credit for your Roth IRA contribution.
- _____ You must begin taking Required Minimum Distributions from your Roth by April 1 of the year after you turn 70-1/2.
- _____ Anyone inheriting your Roth IRA will pay taxes only on the earnings.
- _____ You can convert your 401k to a Roth IRA after you leave your job.
- _____ You can change your mind after converting your TIRA to a Roth and you won’t owe any tax or penalty.
- _____ A good rule of thumb is to not contribute to a Roth if you are less than 10 years from retiring.
- _____ You can “superfund” a Roth IRA by converting the 401k/403b after-tax balance to a Roth IRA with no tax consequences, no matter the size of the account.
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