ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Traditional
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Roth
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Either A or B
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None of the above
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Detailed explanation-1: -You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Roth IRAs do not require withdrawals until after the death of the owner.
Detailed explanation-2: -Age 59½ and over: No withdrawal restrictions Once you reach age 59½, you can withdraw funds from your Traditional IRA without restrictions or penalties.
Detailed explanation-3: -What is an RMD? An RMD is the annual Required Minimum Distribution that you must start taking out of your retirement account after you reach age 73. The amount is determined by the fair market value of your IRAs at the end of the previous year, factored by your age and life expectancy.
Detailed explanation-4: -IRAs: The RMD rules require traditional IRA, and SEP, SARSEP, and SIMPLE IRA account holders to begin taking distributions at age 72, even if they’re still working. Account holders reaching age 72 in 2022 must take their first RMD by April 1, 2023, and the second RMD by December 31, 2023, and each year thereafter.
Detailed explanation-5: -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.