Question

- Assume you make annual contributions to a Roth IRA of $1,250
per year beginning on your 25
^{th}birthday. Assume further that the account is projected to earn an annual return of 7.15% and that you will retire on your 65^{th}birthday. What is the projected balance in the account on the date of your retirement? Assume no contribution on your 65^{th}birthday. In other words, the last contribution occurs at the beginning of the 40^{th}year, on your 64^{th}birthday. - Assume you begin making the contributions above on your
35
^{th}birthday, rather than your 25^{th}birthday, but double the annual contribution to $2,500. What is the projected balance in the account on the date of your retirement? - If you wait until your 40
^{th}birthday to begin making contributions, how much do you have to contribute annually, to reach the same projected account balance on your 65^{th}birthday, as if you had begun contributing at age 25? NOTE – This problem can be solved using the PMT() function or Goal Seek.

Answer #1

Both nondeductible contributions to a traditional IRA and
contributions to a Roth IRA are similar in the sense that neither
provides a tax deduction at the date of contribution. Which of the
two types would be most advantageous to taxpayers and why?
Your client is about to establish his own business and hires at
least 10 employees. They ask you for advice concerning establishing
a qualified versus a non-qualified retirement plan. What do you
advise your client? Would your answer...

Assume that you are 24 years old today, and that you are
planning on retiring at age 65. Your salary is expected to increase
at a rate of 5% per year as long as you work. To save for your
retirement, you plan on making annual contributions to a retirement
account. Your first contribution will be made on your
25th birthday and will be 10% of your salary of $50,000
at that time. You plan to put aside 10% of...

Today is your 40th birthday (this is beginning of period, i.e.,
time 0). You expect to retire at age 65 and actuarial tables
suggest that you will live to be 85. You want to move to Hawaii
when you retire (on your 65th birthday). You estimate that it will
cost you $50,000 to make the move on your 65th birthday. Starting
on your 65th birthday and ending on your 84th birthday (all
withdrawals are at the beginning of the year),...

1) You graduate from college and get your first job. You open a
Roth IRA with $2,000 at the age of 25. You invest $3,000 at age 26,
$4,000 at age 27, and $5,000 at age 28. You then receive a
promotion that brings your income to a level that disqualified you
from making further contributions to the Roth IRA. Construct a
table that shows how much will you have in your IRA at the age of
60 if you...

Assume that you are 30 years old today, and that you are
planning on retirement at age 65. Your current salary is $40,000
and you expect your salary to increase at a rate of 4% per year as
long as you work. To save for your retirement, you plan on making
annual contributions to a retirement account. Your first
contribution will be made on your 31st birthday and will be 9% of
this year's salary. Likewise, you expect to deposit...

You are currently 24. Based on your calculations, you will need
$120,000 of income each year once you retire. You plan on retiring
at age 65, and want to have enough money in your account so that
you can draw payments out for 25 years (with the first payment
taking place immediately upon your 65th birthday). Assume that all
your funds earn an 11% annual return. You will begin making
payments into your retirement account immediately and will make 41...

Assume that you are 30 years old today, and that you are
planning on retiring at age 65. Because your current salary is
$45,000 and You expect your salary to increase at a rate of 5% per
year as long as you work. To Save for your retirement, you plan on
making annual contributions to a retirement account. Your first
contribution will be made on your 31st birthday and will be 8% of
this year’s salary. Likewise, you expect the...

Today is your 40th birthday. You expect to retire at age 65, and
actuarial tables suggest that you will live to be 100. You want to
move to Hawaii when you retire. You estimate that it will cost you
$200,000 to make the move (on your 65th birthday). Starting on your
65th birthday and ending on your 99th birthday, your annual living
expenses will be $25,000 a year. You expect to earn an annual
return of 7% on your savings. ...

HW17. Suppose that beginning on your 25th birthday, you put
$1,000 into a savings account, and you make a new $1000 deposit
every 3 months, up to and including your 45th birthday. The savings
account pays 6% annual interest, compounded quarterly. \\
a. How much money will be in the account on your 45th
birthday?
b. How much will your first $1000 deposit end up contributing to
the amount in your bank account, on your 45th birthday?
c. The total...

Assume that you are 30 years old today, and that you are
planning on retirement at age 65. Your current salary is $45,000
and you expect your salary to remain constant as long as you work.
To save for your retirement, you plan on making annual
contributions to a retirement account. Your first contribution will
be made on your 31st birthday and will be 8% of this year's
salary. Likewise, you expect to deposit 8% of your salary each...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 12 minutes ago

asked 14 minutes ago

asked 34 minutes ago

asked 37 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago