Tennessee Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Tennessee Insurance Exam. Prepare with a database of questions and flashcards, each offering hints and detailed explanations. Ace your exam confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

55
59 1/2
62
65

The correct answer is: 59 1/2

An IRA owner can begin making withdrawals without incurring a tax penalty at the age of 59 1/2. This rule is established to allow individuals to access their retirement savings without financial penalty once they reach this age, as it is generally considered a point when individuals are nearing retirement. It is important to note that while withdrawals may happen without penalties starting at this age, regular income tax may still apply to the funds withdrawn. Earlier withdrawal options exist under specific circumstances, such as for first-time home purchases or certain educational expenses, but these do not fall under the general rule for penalty-free withdrawals. The misunderstanding regarding the ages of 55, 62, or 65 may stem from different retirement plans or rules concerning early retirement distributions, but specifically for IRAs, the threshold is clearly set at 59 1/2. This age serves as a protection to encourage saving for retirement, allowing individuals to maintain their savings longer to potentially grow without interruption.