Taxing Definitions

Definitions – Do you know IRAs?

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Image source: Free Picture: EggsID: 253648 Pdiaz Dreamstime Stock Photos
Image source: Free Picture: EggsID: 253648 Pdiaz Dreamstime Stock Photos

Given the year IRAs were introduced, you may have had access to these retirement accounts your entire working life. But how much do you really know about IRAs? Take the quiz and find out.

1. What year were IRAs first available?

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2. Why does the IRS refer to IRAs as Individual Retirement Arrangements instead of Individual Retirement Accounts?

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3. The most recent IRS Statistics of Income, released in January 2016, measures four types of IRAs for 2013: Traditional IRAs, Simplified Employee Pension (SEP) plans, Savings Incentive Match Plan for Employees (SIMPLE), and Roth IRAs. Which type do you think had the highest end-of-year fair market value?

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4. Which age group had the highest number of IRA owners in 2013?

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All statistics from the Statistics of Income Tax Stats – Special Studies on Individual Tax Return Data page on the IRS web site. 

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Note: Taxing Lessons provides a summarized version of sometimes lengthy court decisions. The full case may include facts and issues not presented here. Please use the link provided in the post to read the entire case.

This information should not be considered legal, investment or tax advice. Taxing Lessons and Top Drawer Ink Corp. do not provide legal, investment or tax advice. Always consult your legal, investment and/or tax advisor regarding your personal situation.

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Right answer!

Individual Retirement Arrangements were included in the Employee Retirement Income Security Act of 1974 (ERISA) and available for the first time in 1975.

Sorry, wrong answer :(
Sorry, wrong answer :(
Right answer!
Individual Retirement Arrangements consist of Individual Retirement Accounts and Individual Retirement Annuities.
Right answer!
According to the IRS, the 2013 year-end fair market value of traditional IRAs was $5.8 trillion. The total year-end value of all four types was $6.8 trillion. In addition to the value of the traditional IRAs, the remainder consisted of $348 billion in SEP plans, $94 billion in SIMPLEs, and $547 billion in Roth IRAs.
Sorry, wrong answer :(
Sorry, wrong answer :(
Sorry, wrong answer :(
Sorry, wrong answer :(
Right answer!
According to IRS statistics for tax year 2013, approximately 19.4 million taxpayers between the ages of 50-55 owned an IRA. Total ownership for ages 30-35 was approximately 19.1 million taxpayers.
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