David Ashley Parker, of Powder Springs, CO, is in the 22 percent marginal tax bracket and is considering the tax consequences of investing $2,000 at the end of each year for 30 years in a tax-sheltered retirement account, assuming that the investment earns 9 percent annually. How much will David's account total over 30 years if the growth in the investment remains sheltered from taxes?

Q: Felicity is 50 years old and earns $115,000 per year. She saves 12% of her annual gross income for…

A: Wages replacement ratio means the ratio of current pre-tax income she will need to maintain her…

Q: You decided to invest $5,000 annually for your retirement 30 years from now. You have a conservative…

A: A Conservative investor is one who wants his money to grow but at the same time doesn't want to risk…

Q: Suppose that Ramos contributes $5000/year into a traditional IRA earning interest at the rate of…

A: Amount deposit every years (PMT) = $3700 Interest rate earned on deposit ( r) = 5% Number of periods…

Q: Tammy Faye requires a 12% before-tax return on her real estate investments. If she invests $78,000…

A: Given that:PV=$78,000Interest Rate = 12% = =0.01Monthly Expenses = $120n=5×12=60 months

Q: Steven, age 43, earns $80,000 annually; and his wage replacement ratio has been determined to be…

A: In capital preservation model safety of fund is given more importance and is conservative model of…

Q: The Johnsons have accumulated a nest egg of $50,000 that they intend to use as a down payment toward…

A: A mortgage refers to a covered loan borrowed for the purchase or maintenance of a property with the…

Q: Someone in the 36 percent tax bracket can earn 7 percent annually on her investments in a tax-exempt…

A: Here,One Time Investment is $18,000Tax Rate is 36%Interest Rate is 7%

Q: Komiko Tanaka invests $18,000 in LymaBean, Inc. LymaBean does not pay any dividends. Komiko projects…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Several years ago John bought an endowment insurance policy that is about to mature. He has the…

A: given data   option 1 gives $20000 now  option 2 gives $40000 in 10 years  for option 2 we will…

Q: Komiko Tanaka invests $14,500 in LymaBean, Incorporated. LymaBean does not pay any dividends. Komiko…

A: Capital gain can be short-term or long-term based on the time period. If the asset is sold in one…

Q: 129,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You…

A: 401(K) is one of the profit sharing plan in which there is contribution from employee and also…

Q: John is trying to decide whether to contribute to a Roth IRA or a traditional IRA. He plans on…

A: After-tax value refers to the  financial worth or value of an item or a quantum of plutocrat after…

Q: Kun is thinking about investing $4,000 at the end of each year for 30 years in a tax-sheltered…

A: Annual investment (P) = $ 4,000 Interest rate (r) = 8.5% Number of annual deposits (n) = 30

Q: You save $5400 each year into a tax - deferred retirement account. If you are in a 25% tax bracket…

A: The taxpayer is required to pay taxes to the taxable income and the taxable income is the gross…

Q: 1) Sabrina waits to start saving for retirement until age 35. If she saves the same $8000 each year…

A: Annual saving (P) = $8000 Period from 35th year to 65th year (n) = 30 Interest rate (r) = 7.00%

Q: . His wage replacement ratio has been determined to be 72%. He expects inflation will average…

A: *Answer:

Q: David Ashley Parker, of Powder Springs, CO, is in the 22 percent marginal tax bracket and is…

A: Future value is the total worth of the amount that is deposited today or in series of payments for…

Q: Angelo has a yearly salary of $65,800. If he pays a 15% federal tax, a 6.2% social security tax, a…

A: YEARLY salary =65800 Total tax=15+6.2+6+3.5=30.7%

Q: Jack is 23 years old. He earns $1,800 fortnightly after tax from his full-time job. He estimates…

A: The FV of an investment refers to the cumulative value of its cash flows at a particular future date…

Q: Mr. Peter Phang, aged 35, is planning to retire at age 55. He understands from his advisor that he…

A: We need to use future value of annuity formula to calculate yearly payment to achieve goal of…

Q: You have $780, 000 in your retirement fund. Assuming no interest is being earned, how many dollars…

A: Monthly Withdrawal= (Initial Retirement Fund)/(Number of Months in 20 Years)Monthly Withdrawal=…

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: Tax savings is the reduction in the amount of income tax that an individual or entity is required to…

Q: Samuel Survivor is planning to save for retirement 35 years from now. He expects to live 25 years…

A:

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: A drop in the level of tax paid by a citizen, corporation, or other taxpayer is alluded to as a tax…

Q: Barry has an annual salary of $85,000 and he plans on working He is concerned that should he die…

A: Present value of annuity Annuity is a series of equal payment at equal interval over a specified…

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: (a) How much tax do you save (in $) each year by making the retirement fund contributions?The tax…

Q: Lifetime savings accounts, known as LSAS, allow people to invest after-tax money without being taxed…

A: The balance in the account will be calculated using the formula future value of annuity deposit.…

Q: I accepted my first job with a $93000 salary, and is already looking forward to retirement in 40…

A: Given: Salary today = $93000 Amount required at the time of retirement = 70% of today salary…

Q: Consider Donald and Joe who are both 30- years of age and recently graduated with a degree in…

A: Amount they will have is future value of monthly savings

Q: Trudy is 35 years old and is considering investing $2,000 per year in a savings account at 8%, or…

A: A Registered Retirement Savings Plan (RRSP) refers to a tax-advantaged investment account available…

Q: Hassnein recently deposited $34,000 in a savings account paying a guaranteed interest rate of 5…

A: Savings account:A savings account is a financial product offered by banks and credit unions that…

Q: A.Jenevive  who is in the 36 percent tax bracket can earn 9 percent annually on her investments in a…

A: Solution:- We know,  Future value = Present value x (1+r) ^n where r = periodic interest rate n=…

Q: Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in a tax-exempt…

A: Here,One Time Invetsment is $13,000Tax Rate is 36%Interest Rate is 8%

Q: Kourtney and Khloe Kardashian are receiving slightly different incomes from investments that they…

A: Present value = Annual Payment * PVCF ( in the case where no. of years are given) Present value =…

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.