Jill Is 45 Years Old and Thinks That Her Future

question 91

Multiple Choice

Jill is 45 years old and thinks that her future tax rate will be lower than what she currently pays, so she wants to defer her taxes on her contributions of up to $5,500 in 2014. Which plan would allow her to meet her goals?

• A) 401(k) plan
• B) Regular IRA
• C) Roth IRA
• D) SEP plan
• E) Spousal IRA

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Definitions:

Underlying Asset's Price

The current market price of the security or commodity that is the basis for a derivative contract, such as options or futures.

Option

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date.

Money

A medium of exchange, unit of account, and store of value that facilitates transactions and measures the value of goods and services.

Worthless

Describes an item that has no value, utility, or financial gain.