SIE practice questionmediumTypes of Retirement Accounts
A 45-year-old investor wants to open an IRA account. Which action is MOST consistent with the rules on IRA contributions?
- ABorrowing money in the account to maximize contributions
- BContributing any amount of money, regardless of income
- COnly investing in municipal bonds
- DContributing earned income up to the IRS annual limit✓ Correct answer
Explanation
Why D — Contributing earned income up to the IRS annual limit
IRA contributions must be from earned income and are limited annually by the IRS. B is false—there are limits. C is incorrect—IRAs can hold various investments. D is false—borrowing is not permitted in IRAs.
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