Asked by Jimmy Miller on May 18, 2024
Verified
No taxes are paid on withdrawals made during retirement from a ________.
A) traditional retirement plan
B) Roth retirement plan
C) 401k
D) 403b plan
Roth Retirement Plan
A retirement savings plan allowing a person to contribute after-tax income, with withdrawals being tax-free under certain conditions.
Tax Withdrawals
Payments or deductions from earnings or income which are removed by the government as taxation.
- Understand the contrasting tax treatment of traditional and Roth retirement plans, including withdrawal rules.
Verified Answer
MB
michael brianMay 23, 2024
Final Answer :
B
Explanation :
Roth retirement plans are funded with after-tax dollars, so withdrawals during retirement are tax-free. Withdrawals from traditional retirement plans (A, C, D) are taxed as ordinary income.
Learning Objectives
- Understand the contrasting tax treatment of traditional and Roth retirement plans, including withdrawal rules.
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