General Securities Sales Supervisor (Series10) Practice Exam

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What is the maximum contribution to an Individual Retirement Account (IRA) for a couple both under 50 in 2016?

$5,500 in one account
$11,000 in one joint account
$5,500 each, in separate accounts
$5,500 divided between two accounts

The correct answer is: $5,500 each, in separate accounts

In 2016, the maximum contribution limit for an Individual Retirement Account (IRA) for individuals under the age of 50 was set at $5,500 per person. For a couple, this means that each partner could contribute up to $5,500 into their separate individual accounts, resulting in a combined total of $11,000 when both contributions are considered. Option C reflects this understanding accurately, as it clarifies that each spouse can make their own contribution of $5,500 to their respective IRAs. This is in accordance with IRS guidelines allowing individuals to contribute individually, maximizing each person's retirement savings opportunity. The other options do not align with the IRS contribution limits. A single joint account cannot exceed the individual limit for contributions, as contributions are capped per person rather than per account. Contributions can’t be combined into one account for the sake of exceeding these individual limits. Therefore, understanding the contribution limits for IRAs helps clarify why the correct answer is that both individuals have the opportunity to contribute individually to separate accounts, maximizing their tax-advantaged retirement savings.