Accounts & CustomersQuestion 64 of 125
A traditional Individual Retirement Account (IRA) offers which primary tax feature?
a.Tax-free withdrawals of all earnings regardless of age
b.Potentially tax-deductible contributions with tax-deferred growth until withdrawal
c.No contribution limits
d.Contributions made only by employers
Explanation
Traditional IRA contributions may be tax-deductible depending on income and workplace plan coverage, and earnings grow tax-deferred. Withdrawals in retirement are taxed as ordinary income, and required minimum distributions apply. Early withdrawals before age 59 1/2 are generally subject to a penalty plus tax.
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Related questions on this topic
- FINRA's minimum maintenance margin requirement for a long stock position is:
- A customer holds long stock with a current market value of $40,000 and a debit balance of $32,000. Using the 25% maintenance requirement, what is the status of the account?
- In a short margin account, the customer profits when:
- A Roth IRA differs from a traditional IRA primarily because a Roth:
- A withdrawal from a traditional IRA before age 59 1/2 is generally subject to:
- A 401(k) plan is a type of:
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