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

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What additional amount can individuals aged 50 and older contribute to their IRA beyond the standard limit?

$500
$750
$1,000
$2,000

The correct answer is: $1,000

Individuals aged 50 and older can make an additional catch-up contribution to their Individual Retirement Accounts (IRAs), allowing them to save more as they approach retirement. The correct amount for this catch-up contribution is $1,000. This provision is designed to help those who may not have saved enough in their earlier years to enhance their retirement savings during their final pre-retirement years. The standard contribution limits for IRAs may change from year to year, but the catch-up contribution remains consistent at $1,000 for individuals aged 50 and older. This additional amount is beneficial for enhancing retirement funds and can provide significant tax advantages as well, reinforcing the importance of retirement planning.