Do You Know These Retirement Account Types? (Quiz)

As you prepare for the future, it’s important to understand the differences between retirement plans so you’re better equipped to make decisions that are right for you. This short quiz can help you explore a few of the various retirement accounts out there and test your knowledge. 

Which type of retirement account is employer-sponsored and offered for employees of public schools, and certain tax-exempt organizations, such as churches and nonprofit organizations? 

A. 401(k)
B. 301(z)
C. 403(b) 

True or false: If your annual income is over $140,000 ($208,000 if married) per year, you can contribute to a Roth IRA.

A. True
B. False 

How much can you contribute to a Traditional IRA each year? 

A. $3,000
B. $6,000
C. $12,000

Answer key: 

1) C.
While a 401(k) is also an employer-sponsored retirement savings plan, it’s not for employees of public schools or tax-exempt organizations.  And as you probably guessed, there’s no such thing as a 301(z) plan! 

2) B.
False. You can only contribute to a Roth IRA if your income is below $140,000 ($208,000 if married) per year. As an added note, contributions to a Roth IRA count toward the same annual contribution limit as a Traditional IRA. If contributions are held in the Roth IRA for five years, and until after you reach age 59½, distributions will be completely tax-free. (However, withdrawals made prior to age 59½ may be subject to a 10% early withdrawal penalty and income taxes on any investment earnings.) 

3) B. 
You can contribute up to $6,000 a year to a Traditional IRA, and this amount is in addition to the $19,500 annual contribution limit for employer-sponsored retirement plans, providing an added boost to your overall annual retirement savings. Plus, if you are age 50 or older, you can contribute another $1,000, for a total of $7,000 in 2022.