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29 September, 10:51

An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after age 70½. The account owner does not have to pay taxes on the growth of his account. What type of retirement account is it?

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  1. 29 September, 11:20
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    The correct answer is B) Roth IRA.

    Explanation:

    Roth IRA accounts are an exceptionally flexible savings option that offers the potential for deferred tax earnings and tax-free withdrawals.

    Pay taxes when you contribute and, in return, you can make withdrawals (qualified with tax exemption) of potential earnings for your contributions. Make withdrawals when you're ready and without having to meet minimum distribution requirements. Keep contributing for as long as you want even after reaching retirement age. Leave your heirs property without federal income taxes.
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