Question

True/False:

1- The expense method is more accurate than the replacement ratio method for estimating retirement income needs?

2- Ira D. Posit, age59, withdrew money from his IRA to pay for a niece's college expenses. Ira must pay income tax but, no penally tax on the amount withdrawn?

3- Alice, age 60, has a 6 year old Roth IRA. Alice can withdraw her initial investment and all investment income and gains tax free?

4- Social Security was designed to serve as an adequate retirement plane for those with no other retirement savings?

Answer 1

1- The expense method is more accurate than the replacement ratio method for estimating retirement income needs?

The given statement is True.

2. 2- Ira D. Posit, age59, withdrew money from his IRA to pay for a niece's college expenses. Ira must pay income tax but, no penally tax on the amount withdrawn? - In case the account is held for more than 5 years then she needs not pay any tax.

3. Alice, age 60, has a 6 year old Roth IRA. Alice can withdraw her initial investment and all investment income and gains tax free? True since the account is held for more than 5 years withdrawals would be tax free.

4. Social Security was designed to serve as an adequate retirement plane for those with no other retirement savings? - True primary purpose was to cater to life post retirement with no other savings for the holder.