How Much Do You Remember: IRA Gift Card – Answers

Good evening Women Supporting Women,

Happy Monday to you all.  I hope you had a wonderful and fabulous weekend.  I spent mine doing two events.  One was a Literacy Genius program for the neighborhood youth and the other was a Pop-Up shop, vendor event.  Both gave me the opportunity to meet amazing people and was blessed to be a part of both events.

Drum roll please.  The winner of the IRA Gift card is……ME.  Yes, I answered all of the questions correctly 🙂

Here are the answers below:

What is an IRA? A: An Individual Retirement Account for Retirement
What is the contribution limit for an IRA in 2019 for a 40-year-old? A: $6000
What is the contribution limit for an IRA in 2019 for a 58-year-old? A: $7000
How much can you contribute into a 401K IRA for a 37-year-old? A: $19000
List the different types of IRAs? A: Traditional, Roth, SEP, SIMPLE, Spousal IRA
Give 2 reasons why someone would consider rolling of an IRA from a previous employer? A: Limited investment option – If your funds are left with a former employer, you are limited to the investment options the company has and no others and no more contributions allowed- When you no longer work for a company, your contributions cease. If you were looking to grow your money by additional contributions, it won’t happen with a former employer
What are Required Minimum Distributions (RMDs)? A: When you are mandated by the IRS to start taking distributions from your tax deferred retirement accounts e.g. 401K, IRAs, etc…
What age does one have to start their RMDs? A: 70 1/2
What is tax deferred money? A: Money that grows without being taxed
Which IRA is considered tax deferred money? A: Traditional IRAs
Which IRA allows you to do withdrawals tax FREE? A: Roth IRAs
Is there a penalty for an early withdrawal? A: Yes. 
If so, what is the age?  A: Any age under 59 1/2 unless the early withdrawal type is on the exemption list (e.g. first time homebuyer)
How long must one have an IRA open and how old must one be before they can withdraw without a penalty? A: Roth IRA has to be open for 5 years and you must be at least 59 1/2.  For the Traditional there is no amount of time it must be open for BUT you must be 59 1/2 as well
What is the IRS penalty for early withdrawals? A:10% 

As always, if you have any questions about anything discussed or would like to learn more about a topic, please feel free to post here or email me at: thefinancialcomforter@gmail.com

Next Up:  5 Main Things A Woman Needs to Know About Her Finances

Have a beautiful and blessed week.

Marsha

Changing the lives in our community….one family at a time

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