Question:All the dollar figures are in today's dollars.Planner Lopez notes that the current inflation rate is 1.3%, but to be cautious he assumes it will be 2% per annum in the future.They can invest their money at 8% nominal rate until retirement and then will be more conservative in their portfolio and earn 6% p.a. throughout retirement.

Their marginal tax rate is 42.7% now.It will drop to 31% when they retire.

I need to know what interest rates should be used pre and post retirement.

In my calculation for the rates, I calculated the pre-retirement discount rate as 1.08(nominal)/1.013(inflation) * 0.431(marginal tax rate before the retirement)

and the post-retirement discount rate as 1.06(nominal after retirement)/1.02(future inflation) * 0.31(marginal tax rate throughout the retirment).

Since the question is asking for the today's dollar, as I know we have to use real rate*marginal tax rate.

I also want to know whether the marginal tax rate should be applied for every saving in each year.

For example, do I have to save $15,000*0.431= $6,465 for year 6-10 ?