BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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401(k)
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Roth IRA
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traditional IRA
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Detailed explanation-1: -Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until you take a distribution (withdrawal) from your IRA.
Detailed explanation-2: -A traditional IRA is an account to which you can contribute pre-tax or after-tax dollars. Your contributions may be tax deductible depending on your situation, helping to give you immediate tax benefits.
Detailed explanation-3: -Traditional IRAs Any deductible contributions and earnings you withdraw or that are distributed from your traditional IRA are taxable. Also, if you are under age 59 ½ you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.
Detailed explanation-4: -The three main types of IRAs are traditional IRAs, Roth IRAs and rollover IRAs. Traditional IRAs are funded with pretax dollars, while Roth IRA contributions are made after taxes. A rollover IRA is an IRA funded with money from a former employer-sponsored 401(k) that doesn’t incur early withdrawal penalties.