Colorado Life Producer License Practice Test

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Study for the Colorado Life Producer License Test. Utilize flashcards and multiple choice questions with hints and explanations. Prepare for success!

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What is the time limit for completing a tax-free rollover to a traditional IRA after receiving a distribution from a qualified plan?

30 days
60 days
90 days
120 days

The correct answer is: 60 days

The time limit for completing a tax-free rollover to a traditional IRA after receiving a distribution from a qualified plan is 60 days. This period is crucial because it allows individuals to ensure their funds remain tax-deferred during the transition from one retirement account to another. If the funds are not rolled over into the traditional IRA within this 60-day window, the distribution may be subject to taxation and possibly early withdrawal penalties, depending on the individual's age and circumstances. Promptly completing the rollover helps individuals maintain their retirement savings and avoid unintended tax implications. Understanding this timeframe is essential for anyone involved in managing retirement accounts to ensure they adhere to the guidelines set forth by the IRS.