Question

Which of the following are true of Roth IRAs but not Traditional IRAs?

A) Distributions are required after reaching 72.
B) Distributions are not required after reaching 72.
C) Contributions are typically deductible.
D) Anyone with income may contribute.

Answer 1

Roth IRAs do not require distributions after reaching age 72, contributions are not typically deductible, and anyone with income may contribute.

Step-by-step explanation:

B) Distributions are not required after reaching 72.

Roth IRA's do not require distributions to be made after reaching the age of 72, unlike Traditional IRAs. This means that individuals can keep their money invested and continue to grow tax-free for as long as they choose.

C) Contributions are typically deductible.

Contributions to Traditional IRAs are typically deductible, meaning individuals can reduce their taxable income by the amount contributed. However, contributions to Roth IRAs are made with after-tax dollars and are not deductible.

D) Anyone with income may contribute.

Anyone with income may contribute to both Roth and Traditional IRAs, but there are income limits for deductible contributions to Traditional IRAs. Roth IRA contributions are not affected by income limits, so anyone with income can contribute.