Which of the following is NOT an advantage of an Individual Retirement Arrangement?

A. It allows tax deferment.
B. It allows taxes to be paid later.
C. It earns compound interest.
D. It makes it easy to withdrawal funds during your working career.

Question

Which of the following is NOT an advantage of an Individual Retirement Arrangement? 

A.	It allows tax deferment.
B.	It allows taxes to be paid later.
C.	It earns compound interest.
D.	It makes it easy to withdrawal funds during your working career.

jim_thompson5910 · Answer

hint: one of these choices goes against the very nature of saving money

wolf1728 · Answer

I'd say it's D - it is a RETIREMENT account and not something you'd use during your working time.

jim_thompson5910 · Answer

yeah you get penalized for withdrawing early (ie, you pay heavy fines and get less money out than you expect)

jim_thompson5910 · Answer

so it's definitely an incentive to keep the money in the account (til age 65 I think?)

wolf1728 · Answer

Okay Jim - it's good to have confirmation on that :-)

jim_thompson5910 · Answer

no, sry it's 59.5 years of age https://www.fidelity.com/retirement-planning/learn-about-iras/ira-withdrawal but there are some exceptions (like using the money to buy a home for the first time)

i<3mybaby · Answer

THANK YOU @jim_thompson5910