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?
- ATraditional IRA
- B401(k)
- CRoth IRA✓ Correct answer
- 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.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 758+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Opens & Maintains Customer Accounts questions
- A Simplified Employee Pension (SEP) IRA is most commonly used by:
- Which of the following best describes the tax treatment of a Roth IRA?
- Which of the following is a requirement for an employer to establish a SIMPLE IRA plan?
- What is the primary tax advantage of contributing to a Traditional IRA?
- Which of the following is a key feature of a 401(k) retirement plan?
- In a JTWROS account with two owners, which of the following is TRUE regarding placing orders?
- A 403(b) plan is available to employees of which type of organization?
- In an individual brokerage account, who is authorized to make trading decisions?