Which of the following statements is (are) 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) To assure lifetime income, IRA funds can be used to purchase a life annuity. In other words, the funds in the IRA can be used to purchase a contract that guarantees a stream of income for life. This can help to address the risk of outliving one's retirement savings.
II) The duration of IRA benefit payments does depend on the rate of return earned on invested assets after retirement and the withdrawal rate. A higher rate of return and a lower withdrawal rate will generally result in a longer period of payments, while a lower rate of return and a higher withdrawal rate may result in a shorter payout period. Thus, the duration of payments is impacted by both investment returns and the rate at which funds are withdrawn.

Which of the Following Statements Is (Are) True with Regard