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Investing for Retirement Financial advisors offer many types of advice to customers, but they generally agree that one of the best things people can do
Investing for Retirement
Financial advisors offer many types of advice to customers, but they generally agree that one of the best things people can do is invest as much as possible in taxdeferred retirement plans. Not only are the earnings from these investments exempt from income tax until retirement but the investment itself is taxexempt. This means that if a person invests, say, $ of his $ income in a taxdeferred retirement plan, he pays income tax that year on only $ of his income. This is probably the best method available to most people for avoiding tax payments. However, which group takes advantage of this attractive investment opportunity: everyone, people with low salaries, people with high salaries, or who?
The file Investing.xlsx lets you investigate this question. It contains data on hypothetical couples: number of dependent children, combined annual salary of husband and wife, current mortgage on home, average amount of other nonmortgage debt, and percentage of combined income invested in taxdeferred retirement plans assumed to be limited to which is
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realistic What can you conclude about the tendency of this group of people to invest in taxdeferred retirement plans?
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