5) In the U.S. one opportunity for accumulating private savings for retirement is known as an Individual Retirement Account (IRA). There are two types of IRAs, a traditional IRA where you invest pre-tax dollars and a Roth IRA where you invest post-tax dollars. For both types you are permitted to contribute up to $5,500 per year when you are less than 65 years of age. Suppose that you decided to invest in a Roth IRA $5,500 per year, let's see how much money you would have by age 65. Consider three individuals: Person A begins contributing at age 18, Person B begins at age 30, and Person C begins at 40. If each individual earns on an inflation-adjusted basis 4% return on their IRA portfolio, how much does each individual have at age 65? What about if they earn 2% or 6%. Age - A Age-B Age-C Balance @ 2% 40 $ 5,500 31 41 $ 11,110 42 $ 16,832 Balance @ 4% $ 5,500 $ 11,220 $ 17,169 Balance @ 6% $ 5,500 $ 11,330 $ 17,510 20