tirement Accounts 6
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Part II-A few more questions
Answer the following questions, based on what you've learned.
1. Your friend Jenny says a Roth IRA has the best tax advantages, because you pay taxes now
and won't have to pay them when you take the money out in
retirement. Why might she
be right?
I
2. Your friend Jomaine says a Traditional IRA or 401(k) has the best tax advantages because
you don't pay any taxes now, and you can wait
until you retire to pay taxes. Why might he
be right?
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3. Your friend Sonia says pensions and 401(k)s are the best retirement options because they
offer you "free money."
What does she mean by this? Does she have a good point? Why or
why not?
4. If your friend Raheem asks you, "What type of account should I use to save for retirement,"
what would you tell
him?
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