Take the 70 1/2 Quiz!

Posted on by in Estate Planning, Income Tax, IRAs, Tax Law.

Many individuals with large IRAs understand that 70 1/2 is the magic age at which they have to start taking required minimum distributions. Unfortunately, these people often underestimate the complexity of the tax laws regarding this issue. Therefore, please take a few minutes to complete this 70 1/2 Quiz!

  1. At what date must you begin taking minimum distributions from your IRA?
    1. 70
    2. 70 1/2
    3. April 1 of the year you turn age 70 1/2
    4. April 1 of the year after you turn age 70 1/2
  2. Should you usually wait until this date before you take out your first minimum distribution?
    1. YES
    2. NO
  3. What is the penalty if you do not take out enough?
    1. 10%
    2. 25%
    3. 50%
    4. 75%
  4. Who can you name as beneficiaries to your retirement account?
    1. Spouse
    2. Children
    3. Grandchildren
    4. Pets
    5. Any or all of the above
  5. If I name my wife as 50% beneficiary, my son as 25% beneficiary, and a charity as 25% beneficiary, can my wife still roll over her interest into her own IRA after I am gone?
    1. Yes
    2. No, because the charity disqualifies the other beneficiaries from electing a rollover or an Inherited IRA.
  6. If I name my revocable trust as the primary beneficiary, am I required to take out my minimum distributions based on my single life expectancy?
    1. YES
    2. NO
    3. MAYBE
  7. If I name my trust as my primary beneficiary and my spouse is the primary beneficiary of my trust, will my spouse be allowed to roll over the proceeds into his or her IRA? [consistency]
    1. YES
    2. NO
  8. If I name a child as the primary beneficiary of the IRA, what options does he or she have with respect to minimum distributions after I die?
    1. within 1 year?
    2. within 5 years?
    3. over his/her lifetime?
    4. A, B or C
  9. I just turned age 70 1/2, am married and my spouse (age 67) is my beneficiary. What is my best choice for calculating my required minimum distributions?
    1. Recalculation?
    2. Term Certain?
    3. Hybrid
    4. Depends on circumstances
    5. Doesn’t matter
  10. Once I turn age 70 1/2, must I start depleting my IRA?
    1. Yes
    2. No
    3. Maybe

How do you think you did? On the average, most people get less than half correct!  Check in tomorrow for all the right answers!

To get the right answers for you, call us and schedule a Free Second Opinion with Jim Lange! 412-521-2732.

 

Quiz from MD Producer