Terminology: Self$-$Directed Retirement Programs

The retirement planning conversations usually involve the employer$$employee relationship. For individuals who are self$-$employed, self$-$directed retirement programs also allow them to plan for their retirement.

Match the terms relating to the basic terminology and concepts associated with self$-$directed retirement programs on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. $($Hint: These are not necessarily complete definitions, but there is only one possible answer$$for each term.$)$

DescriptionTermWith this account, all withdrawals from the account are tax free provided that the account has been open for at least five years and the individual is past age $591/2.$Roth IRA $$For people in their $30$s and $40$s$,$ a Roth IRA is an appropriate investment decision.$$This type of account can be opened by anyone without a retirement plan at his or her place of employment, regardless of income level.$$Like contributions to $401($k$)$ plans, payments from this account may be taken as deductions from taxable income.$$For Keogh and IRA accounts, the magic age is $591/2$ or will be subject to a $10\%$ penalty.