$14\mathrm{.}9$ MINI CASE $8$: THE BETTY AND BOB SHULTZ CASE$[$A$]$ A Retirement and Tax Planning Mini$-$CaseBetty and Bob Schultz are currently sixty$-$nine $($July $26)$ and seventy$-$one $($October $22)$ years of age, respectively. They reside in Anytown, USA, which does not impose any state or local income taxes. Bob will retire on September $1$ of this year from the architectural firm where he has been employed for the past twenty$-$five years. Bob does not have any ownership in the firm. Betty has been an elementary school teacher for forty$-$five years, and she plans to retire at the end of the current academic year on July $1,$ which will almost be her seventieth birthday.Betty earns an annual salary of $$65,000,$ contributing the full allowable amount annually to $403($b$)$ and $457($b$)$ plans. Bob earns a salary of $$85,000$ and typically receives a year$-$end bonus, payable in the first quarter of the subsequent calendar year equal to $15\%$ of his salary. Bob contributes fully to his firm$$s $401($k$)$ plan; the firm matches $50\%$ on the first $6\%$ of deferred salary contributions. Since Bob is over age seventy, he receives Social Security monthly benefits of $$3,050.$ Betty has opted to defer receipt of her Social Security benefits until her seventieth birthday. Her Social Security statement estimates her PIA benefit at age seventy to be $$2,635$ per month. The Schultzes claim the standard deduction for federal income tax purposes.The Schultzes have three adult children, ages forty$-$two, forty, and thirty$-$seven, and six grandchildren ranging in age from three to sixteen. Betty and Bob own the following assets: Assets Value Checking Account $($joint$)$ $ $15,000$ Savings Account $($joint$)30,000$ Automobiles $(2-$ joint$)47,000$ Furniture & jewelry $25,000$ Primary Residence $($joint$)195,000$ Anytown School District $403($b$)$ Plan $($Bob primary beneficiary$)462,000$ Anytown School District $457($b$)$ Plan $($Bob primary beneficiary$)184,000$ XYZ Architectural Design $401($k$)$ Plan $($Betty primary beneficiary$)725,000$ Twenty$-$year Term Life Insurance Policy on Bob$$s Life, Betty primary beneficiary, policy fifteen years ago; annual premium $$17575,000$ Total Assets $ $1,758,000$ Liabilities Credit cards $($balances paid in full monthly$)$ $ $2,500$ First Mortgage Loan @ $4\mathrm{.}5\%$ fixed; $$125$K mortgage $($original term $25$ years; $3$ years remaining$)22,348$ Total Liabilities $ $24,848$ Use this information to answer the following questions.$[$B$]$ Case Questions Based on the case information, Bob was required to take his first RMD from his employer$$s $401($k$)$ plan by December $31$st of the previous year. must take his first RMD from his employer$$s $401($k$)$ plan by the end of December this year. must take his first RMD from his employer$$s $401($k$)$ plan by April $1$st of next year. must take his first RMD from his employer$$s $401($k$)$ plan by December $31$st of next year. Based on the case information both Bob and Betty may contribute the full amount to either a Regular IRA or Roth IRA for this calendar year. Betty, but not Bob, may contribute the full amount to either a Regular IRA or Roth IRA for this calendar year. Bob, but not Betty, may contribute the full amount to either a Regular IRA or Roth IRA for this calendar year. Neither Bob nor Betty may contribute to a Regular IRA or Roth IRA for this calendar year. Betty is eligible to contribute to her employer$$s $403($b$)$ plan and $457($b$)$ plan.