Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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For a 58-year-old with only investment income, what is the maximum annual IRA contribution allowed?

$5,500
$6,500
$7,500
$10,000

The correct answer is: $6,500

The maximum annual contribution to an Individual Retirement Account (IRA) can vary depending on the individual's age and the type of IRA. For individuals under the age of 50, the contribution limit for 2023 is $6,500. However, for those aged 50 and older, there is a provision known as “catch-up contributions” that allows for an additional $1,000 in contributions, bringing the total limit to $7,500. In this scenario, since the individual is 58 years old, they are eligible for the catch-up contribution. Therefore, the maximum annual IRA contribution allowed for a 58-year-old with only investment income in 2023 is indeed $7,500. It's important to note that these limits are applicable to traditional IRAs, and similar rules apply to Roth IRAs, but specifics can differ slightly based on income levels and tax filing status. Thus, considering the age of the individual and the rules regarding catch-up contributions, the correct contribution limit is $7,500.