Series 7 - General Securities Representative Exam
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John lost his job recently and needs money for living expenses. He chooses to withdraw from his Traditional IRA. John is 33 years old. John will have
to pay a 10% early withdrawal penalty and no income tax
A
to pay a 15% early withdrawal penalty
B
no tax or penalty implications
C
to pay a 10% early withdrawal penalty and income tax
D
Explanations
The 10% penalty and income tax will apply to premature withdrawals before the age of 59 1/2 in a Traditional IRA