Which of the Following Statements Are True About a Traditional

question 38

Multiple Choice

Which of the following statements are true about a traditional IRA?
I. Subject to an income limit,in 2016 a single person could contribute up to $5,500 per year ($6,500 if over 50 years old) of pretax income to an IRA.
II. All withdrawals are tax-free.
III. Earnings on the IRA account are not taxed until withdrawn.
IV. You must begin withdrawals at age 59½.
V. Withdrawal(s) can be a lump sum or installments.

• A)I,II,IV
• B)I,II,IV,and V
• C)I,III,and V
• D)II,IV,and V
• E)III,IV,and V

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Definitions:

Aprons

Protective garments worn to keep clothes clean during cooking or other activities.

Annual Salary

The total amount of money earned by an employee in a year, not including bonuses or other extra payments.

Direct Deposit

Payroll or other types of checks that are directly and electronically deposited into a bank account.

Gross Pay

The total amount of an employee's earnings before any deductions are made, such as taxes and retirement contributions.