Why Does a Tax-Deferred Retirement Account Accumulate More Money Than

question 97

Multiple Choice

Why does a tax-deferred retirement account accumulate more money than a taxable account,assuming the same amount is contributed every year and the accounts earn the same return every year?

• A)There are different investment options available for tax-deferred accounts.
• B)You can take bigger risks with assets that generate higher returns in a tax-deferred account.
• C)With tax-deferred accounts,there are no income or capital gains tax liabilities on account activity.
• D)All of the above are correct.
• E)Only A and B are correct.

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Definitions:

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Plans or methods developed to achieve a specific goal or to navigate particular challenges.

Tactics

Specific actions or strategies designed to achieve a particular short-term goal.

Mutual Gains

Benefits that are shared or enjoyed by all parties involved in a negotiation, agreement, or cooperative effort.

Concessions

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