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C-PO-7517 - SAP Certified Technology Associate - SAP Process Orchestration

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NEW QUESTION: 1
Marge is 57 and wants to retire early. Since she is not yet eligible for social security, she wants to begin tapping a variable annuity to which she has been contributing for the last 20 years.
Which of the following statements regarding her withdrawals is true?
A. Marge can begin her withdrawals tax-free and without penalty under IRS rule 72(t) as long as she does so following the specific guidelines until she turns 59 ½, at which point she will no longer have to follow the specific guidelines.
B. Marge can begin her withdrawals without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of five years; however, the withdrawals will be subject to taxation.
C. Marge can begin her withdrawals tax-free and without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of five years.
D. There is no way that Marge can begin making withdrawals without facing a 10% penalty for early withdrawal unless she is disabled or needs the money for medical expenses.
Answer: B
Explanation:
Explanation/Reference:
Explanation: Since Marge is only 57, she can begin her withdrawals without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of 5 years, but the withdrawals will be subject to taxation. Once she starts the program outlined in rule 72(t), she must remain on it for at least five years or until she turns 59 ½, whichever comes last. This means that although she's already 57 and will be turning 59 ½ in 2 ½ years, she will have to continue to follow the guidelines for a full five years, or until she turns 62, in this case.


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