Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions)
Question:
a. When she withdraws the retirement funds in 20 years, she expects her marginal tax rate to be 35%.
b. When she withdraws the retirement funds in 20 years, she expects her marginal tax rate to be 20%.
c. Assume the same facts as in b. except that she earns a 3% after-tax rate of return on investments outside of the retirement accounts?
d. In general terms, reconcile your answer from part b. with your answer to part c.
Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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