Which of the following statements about IRA accounts is true?
A) An IRA is a taxable investment plan that enables a person to save part of his or her income for retirement
B) Current income taxes are paid on IRA deposits
C) The benefit of an IRA is that invested money is not taxed
D) IRA earnings are not taxed as income when they are withdrawn

Question

Quizplus · Accepted Answer

The benefit of an IRA (Individual Retirement Account) is that the money invested within the account grows tax-deferred. This means that any capital gains, dividends, or interest earned within the IRA do not incur taxes until the money is withdrawn, typically at retirement.

Which of the Following Statements About IRA Accounts Is True