Understanding 401k and IRA Accounts

The video, presented by Miss Be Helpful, discusses how many Americans have accumulated over a million dollars in their 401k or IRA accounts, as reported by Fidelity in early 2020. It explains the benefits of 401k plans offered by employers and the importance of choosing the right investments within these accounts. The video also covers IRAs, which are individual retirement accounts that can be opened independently of an employer. Key tips include taking advantage of employer 401k matches, gradually increasing contributions, and being mindful of fees. The video emphasizes the importance of early learning about these accounts to increase the likelihood of retiring as a millionaire.

What was the record high number of people with a million dollars or more in their 401k or IRA accounts in early 2020?

• 600,000

• 500,000

• 350,000

• 441,000

What is a 401k account primarily designed for?

• Building wealth for retirement

• Daily expenses

• Emergency funds

• Short-term savings

Which of the following is NOT an example of an investment you can make within a 401k?

• Mutual funds

• Real estate

• Bonds

• Stocks

What does IRA stand for?

• Income Retirement Account

• Individual Retirement Account

• Investment Retirement Account

• Independent Retirement Account

How can an IRA be opened?

• Through an employer

• Through a government agency

• Individually at a financial institution

• By a family member

What is the benefit of a 401k match offered by a company?

• It offers a higher interest rate

• It doubles your contribution

• It provides tax benefits

• It allows early withdrawal

What percentage of each paycheck do experts recommend contributing to a 401k?

• 20%

• 5%

• 10%

• 15%

Why is it important to pay attention to fees in 401k and IRA accounts?

• They can increase your balance

• They are fixed and do not change

• They can reduce your account balance over time

• They are tax-deductible

What is the potential outcome of learning about 401k accounts early?

• Reduced retirement age

• Higher chances of retiring as a millionaire

• Immediate financial gain

• Increased spending

What is the main message of the video regarding retirement savings?

• Start saving early to increase the likelihood of a secure retirement

• Rely on social security for retirement

• Invest only in real estate

• Avoid using 401k and IRA accounts