Select the correct answer.

Question

Which is the best investment option for a person who wants to make a long-term, tax-free investment?
A.
traditional IRA
B.
Roth IRA
C.
401(k)
D.
money market account

Answer 1

The best investment option for a person who wants to make a long-term, tax-free investment is B. Roth IRA.

A Roth IRA allows contributions to be made with after-tax dollars, and qualified withdrawals (including both contributions and earnings) are tax-free in retirement, making it an excellent option for long-term tax-free growth.