When (leading whether to invest in a Traditional IRA or a Roth IRA one would con
ID: 2478353 • Letter: W
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When (leading whether to invest in a Traditional IRA or a Roth IRA one would consider an except the amount of Income you expect to make at retirement whether you are covered by an employer sponsored retirement plan and. it so. how much income you earn if you want to start drawing out the money at 70 M-1/2 or not whether you want the money to accumulate tax tree or not. How much could an individual earning $187,000 per year accumulate in a Keogh plan if they invested the maximum allowed for 20 years at a return of p percent? Round to the nearest dollar if needed. $2 148 678 $2,392,151 $840 000 $935,000 What would be the difference in the tax consequences of an $18,000 withdrawal from a Roth IRA versus a Traditional IRA if $15,000 represents long-term capital gains, $2,000 short-term capital gains, and $1,000 is interest? Assume a tax rate of 30% and a capital gains tax rate of 10 percent. $5,200 more in taxes with a Traditional IRA $4,800 more in taxes with a Traditional IRA $5,400 more in taxes with a Traditional IRA $5,400 more in taxes with a Roth IRAExplanation / Answer
Answer: 45 The amount of income expect to make at retirement
Because all other facts are important.Traditional IRAs in employer-sponsored retirement plans, such as 401(k) plans, are largely based on income tax deferral.
Roth IRAs have another advantage over other tax-sheltered retirement plans, and it’s one that becomes increasingly important as you move through your retirement years.
Virtually every other tax sheltered retirement plan requires that you begin taking required minimum distributions (RMDs) beginning no later than age 70 ½. In fact, there are stiff penalties if you don’t. Roth IRAs stand alone as the tax-sheltered retirement plan that does not require RMDs.
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