Which of the following is true regarding the contributions to a Roth IRA compared to a Traditional IRA?

Contributions to a Roth IRA being not limited by income is indeed a true statement. Unlike Traditional IRAs, which have income limits that can restrict high earners from contributing directly, Roth IRAs allow individuals to contribute as long as they meet certain criteria, specifically regarding tax filing status and adjusted gross income. However, there are income thresholds at which the ability to contribute directly to a Roth IRA phases out, but high earners can still contribute through a backdoor Roth IRA even if their income exceeds these limits. This unique feature provides more flexible financial planning options for individuals who want to benefit from tax-free withdrawals in retirement.

The other statements about Traditional IRAs and Roth IRAs contain inaccuracies that distinguish the two types of retirement accounts. For instance, Traditional IRA contributions are not universally tax-free and are subject to income limits based on eligibility criteria; contributions may be deductible depending on retirement plan participation. Similarly, Roth IRAs do not have required minimum distributions (RMDs) during the owner's lifetime, which is a key advantage, whereas Traditional IRAs begin requiring withdrawals at age 73 (as of current law). Lastly, the tax implications for contributions to the two types of IRAs differ significantly, with Traditional IRA contributions often being tax-deductible and