Retirement basics: Chapter 5 quiz

When considering a withdrawal strategy for retirement accounts, most planners say that in the first year you can safely begin with up to:

25 percent withdrawals

10 percent withdrawals

2 to 3 percent withdrawals

4 to 6 percent withdrawals

What happens if you don't take a required minimum distribution from a tax-deferred retirement account?

An IRS audit

You are penalized by not being allowed to take a distribution for a certain amount of time

You must take twice the required amount in the next year

A big fine in the form of a 50 percent excise tax on the amount not distributed

Which statement is not true about reverse mortgages?

Anyone with a house can get them

The interest rate is generally higher than with a traditional mortgage

The home must be a primary residence

They have higher than average closing costs

They can diminish the value of an estate