SIE Exam Practice Question 278

Correct Answer: A

Explanation:

A: Contributions to a traditional IRA are usually made with pre-tax dollars, and thus they are taxed upon withdrawal. Additionally, although earnings in an IRA grow tax free, they are taxed upon withdrawal. Taxation of both pre-tax contributions and earnings occurs at the investor's ordinary tax rate, and the investor's age has no bearing on whether or not his withdrawals will be taxed.