Fred and Ginger are Married and File a Joint Return. They are both 31 years old.

Fred has a Roth IRA. Ginger has a Traditional IRA.

Fred was eligible to contribute to his Roth IRA every year. Fred contributed $5,500 each year to his Roth IRA for the first 10 years (during which time it earned 11% per year). After this period, Fred decreased his contributions to $5,000 per year for the next 19 years. His account continued to earn 11% during this time as well.

Ginger contributed $5,500 per year to her Traditional IRA for 29 years. Her account earned an average of 10% per year during this time frame.

ASSUMPTIONS

Some of Ginger's contributions in the later years were non-deductible because her household AGI exceeded the IRS limit. As a result, 20 percent of Ginger's account balance at the age of 60 is considered to be basis.

Fred and Ginger's marginal tax rate is 24% in the year they turn 60 years old. They assume it will remain constant.

1--What is the balance in each of their accounts when they reach 60 years of age?

2--Assuming they wish to draw their account balances down to zero by age 85, how much can they each withdraw (assuming equal withdrawals each year) per year beginning at age 60? (Assume that any withdrawal amounts will satisfy the RMD requirement). Assume that they will both earn 6% on their account balances during the time they are retired (from age 60 to 85).

3--How much will their withdrawals (from question 2) equal on an after-tax basis each year?