SIE practice questioneasyIRA Contribution Limits
Which statement about traditional IRA contributions is correct?
- AThere is an annual contribution limit set by the IRS.✓ Correct answer
- BThere are no age or contribution limits.
- CContributions are always tax-free.
- DOnly employers may contribute.
Explanation
Why A — There is an annual contribution limit set by the IRS.
Traditional IRAs have strict annual contribution limits set by the IRS. Contributions are not always tax-free, and both individuals (not only employers) may contribute, with some age and earned income requirements.
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