Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

A qualified distribution from a Roth IRA must satisfy specific criteria to be considered tax-free. One of the primary requirements is the completion of a five-year holding period for the Roth IRA. This holding period begins on January 1 of the tax year for which the first Roth IRA contribution was made.

In addition to the five-year holding period, qualified distributions can also occur for certain reasons, including the account owner's death or disability. This means that if a Roth IRA account owner passes away or becomes disabled, the beneficiaries or the account owner themselves can withdraw funds from the Roth IRA without incurring taxes or penalties, regardless of their age or how long the account has been open, as long as the funds are withdrawn after the five-year requirement has been met.

The other reasons listed in the options do not fulfill all the necessary criteria to define a qualified distribution, which is why they do not represent complete scenarios. For instance, withdrawals for first-time home purchases do allow for certain tax advantages but come with specific limits ($10,000 lifetime cap) and thus do not count as qualified distributions under the same conditions as those involving death or disability. Similarly, withdrawals made for any reason after age 60 are generally tax-free, but they still need to meet the five-year