Asked by Marish Quilicot on Jun 26, 2024
Verified
A Roth IRA is tax-deferred,so taxes are deferred until the money is withdrawn from the account.
Roth IRA
Deposits are taxable, but when the money is withdrawn after having been there for at least 5 years and the saver is at least 59 1/2 years old, the money and the income earned is tax-exempt, or free from all taxes.
Tax-Deferred
Taxes are paid at the time the money is withdrawn from the account, not when the money is actually earned.
- Recognize the differences between traditional and Roth IRAs and their tax treatment.
Verified Answer
TV
Tachinique VanHoltJun 26, 2024
Final Answer :
False
Explanation :
A Roth IRA is actually tax-free, as contributions are made with post-tax income and withdrawals can be made tax-free after age 59 1/2 as long as the account has been open for at least five years.
Learning Objectives
- Recognize the differences between traditional and Roth IRAs and their tax treatment.
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