New Jersey Life Insurance Exam Practice Question
Which of the following retirement plans is NOT restricted to contribution limits set by the IRS?
Correct Answer: B
Rationale: Individual Annuities, unlike the other options, do not have contribution limits imposed by the IRS. This allows individuals to invest as much as they wish, providing flexibility in retirement savings.
Roth IRAs, 401(k)s, and Individual Retirement Plans are all subject to specific contribution limits to promote equitable tax benefits and prevent excessive tax deferral. For instance, Roth IRAs have income-based limits, while 401(k)s have annual contribution caps. Thus, while these plans encourage saving for retirement, they are regulated to ensure compliance with tax laws, unlike Individual Annuities.
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