Question

dior is 60 years old, has a substantial amount saved in a traditional ira, and is considering rolling over their savings into a roth ira. they want to avoid mandatory minimum distributions (rmds) and plan for tax - free withdrawals during retirement. why does converting to a roth ira meet diors goals better than keeping the traditional ira? a roth ira allows for tax - free withdrawals and avoids mandatory distributions. a roth ira offers higher contribution limits than a traditional ira. a roth ira allows both employee and employer contributions with no penalties. a roth ira provides tax deductions on contributions, unlike a traditional ira

Explanation:

Roth IRAs have no RMDs and qualified withdrawals are tax - free. Traditional IRAs have RMDs and withdrawals are taxed as income. Higher contribution limits, employer - employee contribution aspects, and tax deductions on contributions are not the reasons related to Dior's goals of avoiding RMDs and having tax - free withdrawals.

Answer:

A. A Roth IRA allows for tax - free withdrawals and avoids mandatory distributions