Question

Leif started making contributions to a Traditional IRA when he got his first job, at age 32. His contributions averaged $3,200 annually. Leif was in the 20% tax bracket during his working years, when he continued to make these annual contributions. The average annual rate of return on the account was 6.8%. Upon retirement at age 69, Leif stopped working and making IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Leif dropped into the 10% tax bracket. Factoring in taxes, what is the effective value of Leif’s Traditional IRA at retirement?

Answer 1

Assume annual compounding

Answers:
$440,728.02

$305,314.21

$483.080.97

$391,758.24