Question

question 13 0.25 pts what type of a retirement account is a 401k? an individual retirement account allowing a person to set aside income (that you have paid taxes on first) up to a specified amount each year and invested. qualified employer - established plan to which eligible employees may make salary deferral (salary reduction) contributions on a post - tax and/or pretax basis. a traditional individual account which allows individuals to direct pretax income towards investments that can grow tax - deferred; you are taxed on the money when you pull the money out when youre older. an employer - sponsored retirement plan funded with after - tax money that you can withdraw tax - free once you reach retirement age

Explanation:

A 401(k) is a qualified employer - established plan. Eligible employees can make salary deferral (salary reduction) contributions on a post - tax and/or pretax basis. The first option describes a Roth IRA - like account (individual retirement account with after - tax contributions). The third option is more like a traditional IRA (individual account with pretax contributions and tax on withdrawal). The fourth option is incorrect for a 401(k) as 401(k) contributions aren't strictly after - tax in the way described for tax - free withdrawal.

Answer:

B. Qualified employer - established plan to which eligible employees may make salary deferral (salary reduction) contributions on a post - tax and/or pretax basis.