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Pleaseeeee!! And please pay attention: Assuming monthly payouts, and 18659.27 or 18659.29 is not the right answer!!! Pleaseee help! The difference between a Roth IRA
Pleaseeeee!! And please pay attention: "Assuming monthly payouts", and 18659.27 or 18659.29 is not the right answer!!! Pleaseee help!
The difference between a Roth IRA and a traditional IRA is that in a Roth IRA taxes are paid on the income that is contributed, but the withdrawals at retirement are tax-free. In a traditional IRA, however, the contributions reduce your taxable income, but the withdrawals at retirement are taxable. Assume you plan to devote $5,000 to retirement savings in each year. You will retire in 30 years and expect to live for an additional 20 years after retirement. a. Assume the before-tax interest rate is 5%. What will be your after-tax 20 -year retirement consumption stream if you choose to save in a traditional IRA? Assume your tax rate is fixed at 30\%. (Round your answers to 2 decimal place.) b. What will be your 20 -year retirement consumption stream if you choose to save in a Roth IRA? (Round your answers to 2 decimal place.)Step by Step Solution
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