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Get free followers ~… Dale Mabry ASC (posttax) or not (pretax) at the time of the contribution. © Macmillar posttax Roth IRA Traditional IRA 401(k) Answer Bank Social Security

a) True
b) False

User Thaking
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1 Answer

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Final answer:

Contributions to a Roth IRA are made with post-tax income, not pretax income. Therefore, the correct option is B.

Step-by-step explanation:

A Roth IRA is an individual retirement account that allows contributions to be made after-tax, meaning taxes are paid on the money before it is contributed to the account. Contributions to a Roth IRA are not tax-deductible, but the money can grow tax-free, and qualified distributions can be taken tax-free. A Traditional IRA, on the other hand, allows contributions to be made with pretax income, meaning taxes are deferred until the money is withdrawn from the account. Contributions to a Traditional IRA may be tax-deductible, and the money grows tax-deferred until it is withdrawn, at which point it is taxed. Based on this information, the statement in the question is incorrect. Contributions to a Roth IRA are made with post-tax income, not pretax income.

User Vmatyi
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