You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal? Group of answer choices $59,827 $41,879 $74,783 $36,644
You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal? Group of answer choices $59,827 $41,879 $74,783 $36,644
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal?
Group of answer choices
$59,827
$41,879
$74,783
$36,644
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