Question

Help please?
Jennifer made contributions to an IRA over the course of 20 working years. Her contributions averaged $20,000 annually. Jennifer was in the 39% tax bracket during her working years. The average annual rate of return on the account was 5.5%, bringing the value of the IRA to $697,366.36 by the time she retired. At this point, Jennifer stopped working and making IRA contributions, and instead started living on withdrawals from the retirement account. Jennifer dropped into the 32% tax bracket at retirement. What is the difference in the taxes Jennifer would pay on this account over

Answer 1

time between a Traditional and Roth IRA?

$28,000

$143,972.88

$48,815.65

$67,157.24

Answer 2

@ganeshie8 help please?

Answer 3

@agent0smith help please?

Answer 4

@ElisaNeedsHelp

Answer 5

@ElvenBlackout

Answer 6

@whpalmer4

Answer 7

@hartnn help please?

Answer 8

Traditional : taxed during retirement on whatever the amount account accumulates
Roth : taxed during payments itself

Answer 9

@TheOcean help her please

Answer 10

@amistre64 help please?

Answer 11

hmm

Answer 12

@RadEn help please?

Answer 13

Anyone?

Answer 14

for tax on Traditional, simply take 32% on final amount $697,366.36

Answer 15

i would say $143,972.88 but u may want to check

Answer 16

Tax on traditional :
http://www.wolframalpha.com/input/?i=697366.36*%28.32%29

Answer 17

Find the tax on Roth,
and subtract both

Answer 18

I got the last one

Answer 19

http://www.wolframalpha.com/input/?i=697366.36*%28.32%29+-+20000*0.39*20

Answer 20

@ganeshie8 how do I find the tax on Roth?

Answer 21

tax it during payment time

Answer 22

he is in 39% tax bracket while making payments, right ?

Answer 23

Oh! @ganeshie8 we both got the last one

Answer 24

and he made a total of 20 payments, each payment being 20000

so tax on Roth = 20000*0.39*20

Answer 25

subtracting both gives the last choice.. .looks traditional saves tax in this scenario.. .

Answer 26

@ganeshie8 yay! I'm going to tag you in a few more questions if you don't mind :)

Answer 27

sure :)

Answer 28

wat?

Answer 29

wat?