In general, which of the following statements regarding self-employed retirement accounts is true?
A)In general, SEP IRAs have higher contribution limits than individual 401(k)s if the contributing taxpayer is at least 50 years of age at year-end.
B)In general, SEP IRAs have higher contribution limits than individual 401(k)s no matter the age of the contributing taxpayer.
C)In general, individual 401(k)s have higher contribution limits than SEP IRAs.
D)None of the choices are true. In general, both SEP IRAs and individual 401(k)s have exactly the same annual contribution limits.

Question

Quizplus · Accepted Answer

In general, individual 401(k)s have higher contribution limits than SEP IRAs. While both types of accounts allow for tax-deferred contributions, the maximum contribution limit for an individual 401(k) is typically higher than that of a SEP IRA. Additionally, individual 401(k)s may also allow for employer contributions, which can further increase the total contribution limit. However, the contribution limits for both types of accounts may vary based on factors such as age and income.

In General, Which of the Following Statements Regarding Self-Employed Retirement