Question

Qualified distributions from Roth 401(k) accounts are those made after the account has been open for ______ taxable years and the employee is at least ______ years of age.

a) 5; 59^(1/2)
b) 10; 55
c) 7; 62
d) 15; 65

Answer 1

The correct answer to when qualified distributions from Roth 401(k) accounts can be made is after the account has been open for at least 5 taxable years and the employee is at least 59½ years of age, so the answer is a) 5; 59½.

Step-by-step explanation:

Qualified distributions from Roth 401(k) accounts are those made after the account has been open for 5 taxable years and the employee is at least 59½ years of age. Hence, the correct answer is a) 5; 59½. Roth 401(k)s are a type of defined contribution plan where the employer and employee can contribute, with tax-deferred growth and potential tax-free withdrawals, provided certain conditions are met. These conditions include the account being open for at least five years and the employee reaching the age of 59½, ensuring that retirees can manage their savings effectively without the immediate tax burden, and have the flexibility of tax-free withdrawals in retirement when they might be in a lower tax bracket.