In General, Which of the Following Statements Regarding Self-Employed Retirement

question 147

Multiple Choice

In general, which of the following statements regarding self-employed retirement accounts is true?

• A)In general, SEP IRAs have higher contribution limits than individual 401(k)s if the contributing taxpayer is at least 50 years of age at year-end.
• B)In general, SEP IRAs have higher contribution limits than individual 401(k)s no matter the age of the contributing taxpayer.
• C)In general, individual 401(k)s have higher contribution limits than SEP IRAs.
• D)None of the choices are true. In general, both SEP IRAs and individual 401(k)s have exactly the same annual contribution limits.

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Definitions:

All-Equity Firms

Companies that are financed solely through the issuance of equity, without taking on any debt.

Cash Acquisition

A method of acquiring another company by purchasing its shares or assets using cash as the form of compensation.