Question

You are thinking about opening your own personal retirement account at a local bank. The IRA account that the representative spoke with you about is NOT currently tax deferred for your contributions. What type of IRA account is this?

Answer 1

Answer: The options are missing in the question,they are;

A) Rollover IRA

B) Educational IRA

C) Traditional IRA

D) Roth IRA.

The correct answer to the question is option D

ROTH IRA.

IRA- Individual retirement account.

Explanation: Roth IRA is a type of IRA account,it is a type of tax-advantaged retirement savings account.it allows one to pay more taxes inorder to get a bigger tax savings down the line as the investment grows, when it's time for withdrawal,it will be tax-free.

The contributions in Roth IRA are not tax-deductible, but once you start withdrawing funds, the money is tax-free. savings are built by allowing the owner of the Roth IRA to make regular contributions and invest them in a portfolio of stocks, bonds, mutual funds or other investments.the taxes on investment transactions that occurs in the Roth IRA account are deferred until withdrawal of any earnings are made. Just like other IRA accounts,Roth IRAs offer several key benefits, including tax-free growth, tax-free withdrawals in retirement, and no required minimum distributions,the only disadvantage of a Roth IRA is that contributions to a Roth are limited by your household income.