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A retirement plan that provides the possibility for tax-free distributions and tax-deferral of earnings until they are distributed is called a:

User Carmela
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Answer: Roth IRA

Step-by-step explanation:

A Roth IRA allows a person to contribute income that is already taxed to their retirement account. As the income is already taxed, when it is distributed in retirement, it would be tax free.

People tend to choose this if they feel like taxes would increase in future as opposed to the present and so would like to take advantage and save on taxes.

There are however, restrictions on the amount that can be contributed however and people who earn more than a certain amount per year do not qualify for this retirement plan.

User Techmagister
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