Challenge Your 401(k) Smarts - CentSai Education

Question 1/12

1. A 401(k) plan is…*

A retirement plan for employees of non-profit organizations
A retirement plan for employees of for-profit companies
A retirement plan exclusively for A-list celebrities
A retirement plan for state and government employees

Question 2/12

2. A matching contribution takes place when…*

Your employer agrees to make a deposit that is equal to the amount that you contribute to your 401(k)
You deposit at least $1,000 into your 401(k)
You work for five or more years
Your employer makes a deposit into your account based on the percentage you contribute, up to a stated maximum

Question 3/12

3. Which of the following is true regarding 401(k) loans?*

You must have a good credit score to take a 401(k) loan
You can only take loans for a few specific purposes
You generally cannot borrow more than 50 percent of your 401(k) at any time
You must pay off any 401(k) loans before taking out another

Question 4/12

4. Lebron James and Stephen Curry open a 401(k). What’s the minimum amount that the NBA must contribute to the plan each year?*

There is no mandatory minimum
$100,000
$350,000
$1 million

Question 5/12

5. What does “vested” mean?*

To have complete ownership of all the funds you contributed to the 401(k) plan
To have complete ownership of your employer's contributions to your 401(k) plan, but not your own
To have complete ownership of funds contributed to the 401(k) plan
None of these describe being vested

Question 6/12

6. True or False: When you quit your job, your 401(k) automatically carries over to your next employer.*

True
False

Question 7/12

7. You get a job with Beyoncé's company, Parkwood Entertainment, and are offered a 401(k) plan. You can enroll immediately if…*

Beyoncé gives you the green light
You have a minimum deposit of $1,000 to get started
There is no waiting period or requirement for hours worked
The retirement plan administrator tells you to go ahead

Question 8/12

8. The maximum amount you can contribute to a 401(k) plan annually if you are under 50 is…*

$15,000
$18,500
$20,000
$24,000

Question 9/12

9. Stacy's mom, who recently turned 45, decides to take out a 401(k) loan so that she can treat Stacy and her friends to the VIP experience with Taylor Swift. What happens if Stacy's mom can't repay the loan?*

It will be converted into a premature distribution
She will be assessed for income tax on the unpaid balance
A 10 percent early withdrawal penalty will apply
All of these are true

Question 10/12

10. Your waiting period – or the time between your hire date and when you can enroll in a 401(k) plan – ends when…*

You’ve been employed for one month
The rules vary by employer
You’ve been employed for six months
You’ve been employed for one year

Question 11/12

11. At what age can you generally take distributions from your 401(k) without incurring a premature distribution penalty?*

55
59
59 1/2
65

Question 12/12

12. It may make sense to borrow from your 401(k) if…*

You want to buy a new Rolls Royce
You’re in a major financial bind and a payday loan is your only other option
You want to pay for your destination wedding
You want to go on vacation to Hawaii with your friends, but your funds are limited

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