Which of the following statements is true with regard to the adequacy of IRA funds during retirement?
I.To assure lifetime income,the IRA funds can be used to purchase a life annuity.
II.The duration of IRA benefit payments depends on the rate of return earned on the invested assets after retirement and the withdrawal rate.

Question

Quizplus · Accepted Answer

I is true because IRA funds can be used to purchase a life annuity, which provides a guaranteed income for life. This ensures that the retiree will have lifetime income even if they outlive their other retirement savings.
II is also true because the duration of IRA benefit payments will depend on how much is withdrawn each year, the rate of return earned on the investments, and the overall size of the account. If the account earns a high rate of return and withdrawals are kept low, the funds could last longer. However, if the account earns a low rate of return and withdrawals are high, the funds may only last for a few years.

Which of the Following Statements Is True with Regard to the Adequacy