You plan to invest $9,600 per year (in real terms or 2023$) for 30 years in an IRA fund with a real expected annual rate of return of 6.5% before taxes. Assume an effective annual inflation rate of f = 0.03 for this example. The IRA contribution is fully tax deductible at deposit and all but the first $15,000 of annual retirement withdrawals are fully taxed. Your current tax bracket is 30% but you expect your tax bracket to decrease to 15 % during your retirement years. Assume that, at retirement, you are allowed to amortize your accumulated savings at a rate of _RBT = 0.04 with constant real payments over 30 years of expected retirement.

a. Determine real after-tax standard of living (in 2023$) your savings plan could finance. b. If you saved the same after-tax amount (be careful here) in an account with the same before-tax savings and retirement rates of returns as in part (a) but only the real component of your return being taxed each year, what level of constant annual real retirement income would you be financing?