SIE Understanding Trading, Customer Accounts and Prohibited Activities Practice Question 11

Correct Answer: D

Explanation:

D: Choice D reflects a significant attraction of retirement accounts: tax deferral. Choice A is not necessarily true, and a retired person may not need tax deferral. Choice B may be true of an employee-sponsored retirement account, such as a 401k. However, not every retirement account is opened by an employee. It may be opened by a self-employed person, or the spouse of a person with income. Choice C does not reflect the typical use of a retirement account. A person with an annuity already has tax deferral. Many teachers may begin contributing to a retirement annuity in a 403b account.