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When you participate in a traditional 401(k) plan, the taxable salary that your employer reports to the IRS is reduced by the amount that you defer to your account. This means income taxes on that money are postponed until you withdraw from your account, usually after you True False Salary-deferral plans like 401-K plans are generally not self directed. This means that the plan sponsor decides how your money is invested. True False If you participate Roth 401(k), though, the amount you defer doesn't reduce your taxable income or your current income taxes. But when you withdraw after you retire, the amounts you take out are tax-free, provided you're at least 59% and your account has been open at least five years. True False Dividends that investments pay if they are in a 401-K are not taxed until withdrawal. The sponsor will reinvest the dividends in by the owner of the plan assets. This tax deferral enables more funds to be invested than if the dividends were used. This is a benefit of using retirement rather than simply investing in a fund whose distributions are taxed. True False Individuals can contribute up to $45,000 per year to traditional IRA & Roth IRAs. This limit is decided by the employer who sponsors the plan. True False If you leave your job after six months, the money your current employer contributed to your 401-K may not be owned by you. It will depend on the vesting rules that your employer has determined. True False If you leave your job after six months, the money you contributed to your 401-K may not be owned by you. It will depend on the vesting rules that your employer has determined. True False

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