Fred, age 50, plans to retire when he reaches age 65. He is considering investing in either an IRA or a Roth IRA. He plans to contribute $6,000 per year until he retires. Fred expects his marginal tax rate to be 25% until he retires, when he expects his marginal tax rate to drop to 15%. He anticipates that the rate of return on either IRA will be 8% before considering any tax effects. Prepare a memo analyzing the tax effects of investing in a regular IRA versus a Roth IRA. Discuss factors that might influence Fred’s decision to choose either an IRA or a Roth IRA. Assume that Fred meets the income limits for making the maximum annual contribution.