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Series 7 practice questionmediumRetirement Accounts — Required Minimum Distributions

Which of the following retirement accounts is NOT subject to required minimum distributions (RMDs) during the account owner's lifetime?

  1. ATraditional IRA
  2. B401(k)
  3. CRoth IRA✓ Correct answer
  4. DSEP IRA
Explanation

Why C — Roth IRA

Roth IRAs are the only type of retirement account that is not subject to required minimum distributions during the original account owner's lifetime. Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, and 403(b)s all require the owner to begin taking RMDs starting at age 73 (under SECURE 2.0 Act). This is a significant advantage of the Roth IRA for estate planning purposes.

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