SIE Exam Practice Question 654

Question: 654

Alex, age 70, has contributed $20,000 to a Roth IRA throughout his career. The account value is now $30,000. If Alex withdraws the entire amount, how much tax will he owe if he's in the 28% tax bracket?

Correct Answer: A

Explanation:

Roth IRA contributions are made with after-tax dollars and grow tax-free. Alex will not owe taxes when he takes the distribution.

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