Roth 401k FAQs Quiz - Test Your Knowledge

1) Which of the following is the correct choice regarding pre-tax and after-tax 401k contributions:

a) Pre-tax contributions are made AFTER taxes while after-tax contributions are made BEFORE taxes have been paid.
b) Pre-tax contributions are made BEFORE taxes while after-tax contributions are made AFTER taxes have been paid.
c) Both have no effect on gross taxable income
d) None of the above

2) In Traditional 401k Retirement plans, contributions are made:
a) Pre-tax
b) After-tax
c) After tax refunds

3) In Roth 401k Retirement plans, contributions are made:
a) After tax refunds
b) Pre-Tax
c) After-Tax

4) The maximum 401k contributions you can make to both a Traditional 401k Plan and a Roth 401k Plan in 2006 is:

a) $10,000
b) $12,000
c) $14,000
d) $15,000

5) Roth 401k Contributions you make must remain in the plan for minimum ____ years in order for the lump-sum earnings to be tax-free at the time of withdrawal.

a) 4 years
b) 5 years
c) 6 years
d) 7 years

6) Withdrawals from a Roth 401k cannot be withdrawn by anyone less than the age of ___ years (unless you want to pay a 10% early-withdrawal penalty fee).

9) 401k Catch-Up contributions are meant for people over the age of 50 that are allowed to contribute an additional $____ (in 2006) on top of their maximum limit of $15000.

a) $3000
b) $4000
c) $5000
d) $6000

10) Most companies require new employees to work for atleast ____ years before they are eligible for a 401k retirement plan:

a) 3-4 years
b) 2-3 years
c) 1-2 years
d) 6 months - 1 year