Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

The correct answer is that distributions from an Individual Retirement Account (IRA) would be exempt from a 10% premature penalty if they are taken by a qualified reservist. Under certain circumstances, individuals called to active duty can access their IRA funds without incurring the early withdrawal penalty. This exemption is intended to provide financial relief to reservists who may need to access their retirement savings due to their service obligations.

Separation from service at age 55 does not automatically exempt an individual from the penalty for early withdrawals from an IRA. While it allows for penalty-free withdrawals from a 401(k) plan, it does not apply to traditional IRAs. Similarly, inheriting IRA funds allows the recipient to take distributions but they are subject to different tax regulations rather than simply being labeled as penalty-free. Understanding these nuances is critical for effective retirement planning and withdrawal strategies.