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

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Enhance your competence for the Series 6 Exam. Study with expertly crafted multiple-choice questions, each complete with hints and detailed explanations. Elevate your performance and pass the exam with confidence.

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If an individual is 55 years old, what is the maximum contribution they can make to their IRA?

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

The correct answer is: $6,500

The maximum contribution an individual can make to a traditional IRA or a Roth IRA is subject to annual limits set by the IRS. As of 2023, individuals under 50 years of age can contribute up to $6,000. However, since the individual in this scenario is 55 years old, they qualify for a "catch-up" contribution, which allows those aged 50 and older to contribute an additional amount to their IRA. For 2023, the catch-up contribution limit is $1,000. Therefore, for someone who is 55 years old, the maximum total contribution to an IRA would include the standard limit of $6,000 plus the catch-up contribution of $1,000, resulting in a maximum contribution of $7,000. However, it's important to note that the options provided might have a typographical error regarding the relevant year or the specific catch-up amount, as the answer indicates $6,500 instead of the correct $7,000. Therefore, the option that reflects the prevailing rules for individuals over 50 years old aiming to maximize their retirement savings is the appropriate reasoning leading to this maximum contribution amount.