Question

Which of the following statements regarding Roth IRAs and pre-tax 401(k) plans is(are) CORRECT?

A) There are income limits for Roth IRAs.
B) There is no income limitation to participate in a pre-tax 401(k) plan.
C) There is no requirement to start taking distributions from a Roth IRA while the original owner is living.
D) There is no requirement to start taking distributions from a pre-tax 401(k) while the participant is living.

Answer 1

The correct statements regarding Roth IRAs and pre-tax 401(k) plans are: There are income limits for Roth IRAs; There is no requirement to start taking distributions from a Roth IRA while the original owner is living; There is no requirement to start taking distributions from a pre-tax 401(k) while the participant is living.

Step-by-step explanation:

The correct statements regarding Roth IRAs and pre-tax 401(k) plans are:

A) There are income limits for Roth IRAs.

C) There is no requirement to start taking distributions from a Roth IRA while the original owner is living.

D) There is no requirement to start taking distributions from a pre-tax 401(k) while the participant is living.

Roth IRAs do have income limits, meaning not everyone is eligible to contribute to a Roth IRA. Contributions to a Roth IRA are made after taxes and there is no requirement to start taking distributions from a Roth IRA while the original owner is alive. Additionally, pre-tax 401(k) plans do not have distribution requirements while the participant is living.