Yon made contributions to a Traditional IRA over the course of 30 working years. Her contributions averaged $5,000 annually. Yon was in the 27% tax bracket during her working years. The average annual rate of return on the account was 3%. Upon retirement, Yon stopped working and making IRA contributions. Instead, she started living on withdrawals from the retirement account. At this point, Yon dropped into the 15% tax bracket. Factoring in taxes, what is the effective value of Yon’s Traditional IRA at retirement? Assume annual compounding.

Question