1. When you retire, your tax rate is likely to be lower than it was when you were working. (Think about that for a moment.) 1. When you retire, your tax rate is likely to be lower than it was when you were working. (Think about that for a moment.) True False

2. Social Security benefits are tax-free. True or False* 2. Social Security benefits are tax-free. True or False* True False

3. Withdrawals from which of the following retirement plans are tax-free once you retire:* 3. Withdrawals from which of the following retirement plans are tax-free once you retire:* A. 401(k)s B. Traditional IRAs C. Roth IRAs D. All of the Above E. None of the Above

4. There’s a good chance that some (or all) of the income you receive from any pension or annuity you own is taxable. True or False* 4. There’s a good chance that some (or all) of the income you receive from any pension or annuity you own is taxable. True or False* True False

5. Required minimum distributions (RMDs) – which are taxed as ordinary income – kick in at age 72 for holders of traditional IRAs and 401(k)s. And the percentage that the IRS requires you to withdraw each year goes up as you get older. True or False* 5. Required minimum distributions (RMDs) – which are taxed as ordinary income – kick in at age 72 for holders of traditional IRAs and 401(k)s. And the percentage that the IRS requires you to withdraw each year goes up as you get older. True or False* True False

6. All of the following statements about RMDs are true except:* 6. All of the following statements about RMDs are true except:* A. If you fail to take your RMD, you’ll face a tax penalty of 50% of the amount you should have withdrawn. B. The calculations for RMDs and the way you make your withdrawals are the same whether they’re for IRAs or 401(k)s. C. The withdrawals are taxed as regular income, so RMDs could push you into a higher tax bracket. D. The increase in your adjusted gross income could trigger higher taxes on your Social Security benefits, a surtax on your taxable investments and a Medicare high-income surcharge.

7. While you can’t escape RMDs there are ways to minimize your tax burden. Which strategy below can be helpful for some retirees concerned about their tax bills?* 7. While you can’t escape RMDs there are ways to minimize your tax burden. Which strategy below can be helpful for some retirees concerned about their tax bills?* A. Limit your withdrawals to be the lowest percentage allowed by the IRS B. Consider converting a traditional IRA or 401(k) to a Roth IRA C. Keep working beyond age 72 because you don’t have to take RMDs from your current employer’s 401(k) account until you actually retire D. All of the above

8. If your spouse dies and you get a big life insurance payout, you’d better be prepared for a sizable tax bill. True or False 8. If your spouse dies and you get a big life insurance payout, you’d better be prepared for a sizable tax bill. True or False True False

9. How valuable must an individual’s estate be at death to be hit by federal state taxes in 2020?* 9. How valuable must an individual’s estate be at death to be hit by federal state taxes in 2020?* A. $500,000 B. $5.49 million C. $9.48 million D. $11.58 million

10. If you’re over 65, you can take higher standard deduction than other folks are allowed. True or False* 10. If you’re over 65, you can take higher standard deduction than other folks are allowed. True or False* True False