Basics
Who is eligible for a Traditional IRA?
Almost everyone with earned income may participate.
Can you as a minor with no job contribute money to a Roth IRA?
No, you may not; you must have income.
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What can you invest in inside a Roth IRA?
Stocks/Bonds/Mutual Funds/ETF/Options
No, as it is qualified for the requirements given
What is a Roth IRA?
A retirement account where you invest money after taxes.
What is the limt to how much you can contibute to a Roth IRA each year?
around $6500.
Is withdrawing contributions (money that you put in) allowed at any time
Is a Roth IRA something you invest in, or is it an account type?
It is not an investment as it holds your investments into 1 place, so it would be considered an account.
Is there a minimum required age to start taking money out of the account? (No required minimum distributions)
False.
At what stage of life is a Roth IRA used?
Retirement stage.
What are some examples of earned income?
Earned income includes:
Wages, Salary, Tips, Self Employed income, Alimony
If you withdrawal earnings from a Roth IRA before age 59 1/2, will you always pay a penalty?
No as there are exceptions like disability, etc; but normally you would pay taxes and a penalty
ALL TEAMS RECIEVE POINT
What is it called when an investment makes you money over time?
Growth/Return
Is it possible for me to lose money from my Roth IRA
Yes, as it depends on the required age and other restrictions per website, plus the market moving with ease Ms. Luciano.
What type of money is put into a Roth IRA?
Money that has already been taxed
Why can someone who has money lying around, but no job, not be able to contribute to a Roth IRA?
They must have earned income/must fit in the parameters of the minimum and maximum contribution amount.
What is the penalty for early withdrawal of earnings in a Roth IRA?
What is paying taxes on the amount withdrawed
Why is starting a Roth IRA earlier better?
It allows your contributions to grow more due to the extended time.
If you are implementing a Roth IRA into your finances, should the. taxes will be higher later on or lower
It will be a higher tax later due to the amount of money entered
What is the main benefit of a Roth IRA?
Tax-free withdrawals during retirement.
What may happen if you contribute more than the allowed limit
A penalty is given (ex. 6% excise tax)
How long must an account be open before tax-free withdrawals are permitted?
How does a Roth IRA grow? (linear, exponentially, etc).
Through tax-free compound interest
What is one major advantage of a Roth IRA over a traditional IRA?
The biggest and main components that let it stand out are the tax-free withdrawals