A Roth IRA is funded with after-tax dollars, allows interest or dividends to accrue tax-free, permits you to withdraw your contribution at any time, and provides for tax-free earnings if you hold the account 5 years and are 59 1/2 at withdrawal. Therefore, E is the best choice as it lists all the options.

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A Roth IRA

Question 147

Multiple Choice

A Roth IRA

A) is funded with after-tax dollars.
B) allows interest or dividends to accrue tax-free.
C) permits you to withdraw your contribution at any time.
D) provides for tax-free earnings if you hold the account 5 years and are 59 1/2 at withdrawal.
E) does all of these.

Correct Answer: