Question

1. select the true characteristic of a roth ira.

a. there is no limit to the amount you can contribute to a roth ira
b. the roth ira has been around longer than the traditional ira (the roth debuted in the 1930s)
c. the capital gains, interest, & growth of a roth ira can be withdrawn tax - free in retirement
d. you are taxed on the money you withdraw in retirement from your roth ira (it is taxed as ordinary income)

Explanation:

• Option a: Roth IRA has annual contribution limits, so a is false.
• Option b: Traditional IRA was introduced earlier (1974) than Roth IRA (1997), so b is false.
• Option c: A key feature of Roth IRA is that qualified withdrawals (including capital gains, interest, growth) in retirement are tax - free, so c is true.
• Option d: Roth IRA withdrawals in retirement (qualified) are not taxed as ordinary income, so d is false.

Answer:

c. The capital gains, interest, & growth of a Roth IRA can be withdrawn tax - free in retirement