3
QuizMultiple Choice

Building a Smart Retirement Plan — Quiz

Question 3 • Personal Finance

Which account allows tax-free withdrawals in retirement if qualified?

Answer
A
savings account
B
401(k) only
C
Traditional IRA
D
Roth IRA

Explanation

A Roth IRA allows qualified withdrawals in retirement to be tax-free, including both contributions and investment earnings. Traditional IRA and 401(k) withdrawals are generally taxed as ordinary income; a regular savings account is not a retirement account with this qualified-withdrawal rule.

AI-written and checked against the verified answer.

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