Which of the following is a true statement regarding saving for retirement?
A)In a given year, a taxpayer may participate in either an employer-sponsored defined benefit plan or defined contribution plan but not both.
B)In a given year, a taxpayer who receives salary as an employee and also receives self-employment income may participate in an employer-sponsored defined contribution plan or may contribute to a self-employed retirement account but not both.
C)In a given year, a taxpayer may contribute to an IRA (either traditional or Roth)or contribute to a self-employment retirement account but not both.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

None of the choices are correct. Taxpayers may participate in both an employer-sponsored defined benefit plan and defined contribution plan in the same year, as long as they meet eligibility requirements. Taxpayers who receive both salary as an employee and self-employment income may participate in both an employer-sponsored plan and a self-employed retirement account as long as they meet contribution limits. Taxpayers may contribute to both an IRA and a self-employment retirement account in the same year, but there are contribution limits and eligibility requirements that must be met.

Which of the Following Is a True Statement Regarding Saving