Help please?

Faith wants to retire in 35 years. She makes annual contributions to a Roth IRA in the amount of $3,950. She is taxed at 35% today, but anticipates that will change to 25% in her retirement. If the average annual rate of return on the account is 6.3%, what is the net value of Faith’s IRA account when she retires?

$305,053.33

$351,984.61

$420,925.32

$434,750.32

Question

Help please?

Faith wants to retire in 35 years. She makes annual contributions to a Roth IRA in the amount of $3,950. She is taxed at 35% today, but anticipates that will change to 25% in her retirement. If the average annual rate of return on the account is 6.3%, what is the net value of Faith’s IRA account when she retires?

 $305,053.33

 $351,984.61

 $420,925.32

 $434,750.32

tkhunny · Answer

Needs a little help.  Define a ROTH IRA.  Is that pre-tax funds?  If so, why do we care about the accumulation tax rate.  In any case, why do we care about the tax rate after retirement?