SIE practice questioneasyRetirement Plans
A 401(k) is best described as:
- AAn employer-sponsored retirement plan allowing employee contributions✓ Correct answer
- BA custodial account for a minor
- CA margin account
- DAn options account
Explanation
Why A — An employer-sponsored retirement plan allowing employee contributions
A 401(k) is a tax-advantaged retirement account sponsored by an employer where employees can contribute pre-tax dollars. Custodial, margin, and options accounts serve other, distinct purposes.
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