Saving with a progressive tax B D E 1 Retirement Years Income Growth Rate of Inflation Exemption Now 2 25 0.07 0.03 3 45 Age 30 Income Deflator 10000 Exemption Tax rates in Table 21.3 F Savings Rate ROR 0.15 0.06 H rROR 0.0291 Taxes Savings Cumulative Savings rConsumption 50,000 1.00 10,000 8,000 6,300 6,300 35,700 31 53,500 1.03 10,300 8,716 6,718 13,396 36,958 9 35 70,128 1.16 11,593 12,489 8,646 51,310 42,262 19 45 137,952 1.56 15,580 32,866 15,763 248,018 57,333 29 55 271,372 2.09 20,938 76,587 29,218 731,514 79,076 39 65 533,829 2.81 28,139 186,335 52,124 1,833,644 104,970 40 Total 632,759 2,116,533 799,371 Real Annuity 37,059 41 RETIREMENT 42 Age Nom Withdraw Deflator Exemption Taxes Funds Left rConsumption 43 66 107,408 2.90 28,983 16,207 1,836,254 31,467 47 70 120,889 3.26 32,620 15,371 1,813,134 32,347 52 75 140,143 3.78 37,816 13,083 1,683,643 33,599 57 80 162,464 4.38 43,839 8,831 1,392,054 35,045 62 85 188,341 5.08 50,821 1,757 864,701 36,714 67 90 218,338 5.89 58,916 0 0 37,059 68 Total 3,916,018 227,675 sessment Tool iFrame Assume a traditional tax shelter Spreadsheet 21.6, calculate the effects of an increase of 1% in the lowest tax bracket to an increase of 1% in the highest tax bracket. Lowest tax rate Highest tax rate Real Retirement Annuity Effect Reduce Reduce