Which account allows tax-deductible contributions now, with taxes due on withdrawals later?

• A. Traditional IRA
• B. Roth IRA
• C. 401(k)
• D. Pension

Answer: (A)

This describes tax timing: you get a deduction for contributions now, and you pay taxes later when you withdraw the money. A traditional IRA fits this pattern because eligible contributions can reduce your current taxable income, the account grows tax-deferred, and withdrawals in retirement are taxed as ordinary income.

Roth IRA, by contrast, uses after-tax contributions and withdrawals are typically tax-free. A 401(k) can also have tax-deductible contributions and be taxed on withdrawal, but the traditional IRA is the classic example used for this description. A pension is a different type of retirement benefit, not an individual account with deductible contributions in the same sense.