Which Statement Is True Regarding IRA Distributions

question 30

Multiple Choice

Which statement is true regarding IRA distributions?

• A) The minimum distribution rules apply to Roth IRAs, but not to traditional IRAs.
• B) Distributions from a Roth IRA are taxed at the individual's marginal tax rate.
• C) The IRA penalty tax applies to all traditional IRA distributions before age 59.5 with no exceptions.
• D) Unless a life annuity is issued, a retiree may still be alive when the IRA account is exhausted.

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Definitions:

Event

An occurrence or happening, especially one of significance.

Law of Small Numbers

A cognitive bias that leads people to make unjustified conclusions based on limited data.

Risks

The potential for losing something of value, or the uncertainty regarding the outcome of an action or decision.

Probability

The likelihood or chance of an event occurring, often expressed as a number between 0 and 1.