5
QuizMultiple Choice

Individual Retirement Plans — Quiz

Question 5 • Financial Math

Nehemiah withdraws $⁢12,000 from their traditional IRA at age 45 What is the penalty for this early withdrawal, assuming no exceptions apply?

Answer
A
1 dollars comma 500
B
6 dollars comma 000
C
1 dollars comma 000
D
1 dollars comma 200

Explanation

Withdrawals from a traditional IRA before age 59½ generally incur a 10% early-withdrawal penalty when no exception applies. Ten percent of $12,000 is $1,200, so the penalty is $1,200.

AI-written and checked against the verified answer.

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