Reference no: EM133416

Question :

1. Karen is single and is an active participant in her employer retirement plan. She contributed $5,500, the maximum amount allowable, to an individual retirement account (IRA). For each of the subsequent, select the best answer-

1. ___ She is early in her career and had AGI of $50,000. She expects that when she retires she can be in a higher tax bracket than right now.

2. ___ She is early in her career and had AGI of $65,000. She expects that when she retires she may be in a lower tax bracket than right now.

3. ___ She is early in her career and had AGI of $80,000. She expects that when she retires she can be in a higher tax bracket than right now.

4. ___ She is in her peak career earning years and had AGI of $350,000. She expects that when she retires she will be in a lower tax bracket than right now.

A. Contribute $3,300 to a deductible traditional IRA and $2,200 to a Roth IRA

B. Contribute $2,200 to a deductible traditional IRA and $3,300 to a Roth IRA

C. Contribute $5,500 to a Roth IRA

D. Contribute $5,500 to a deductible traditional IRA.

E. Contribute $5,500 to a non-deductible traditional IRA or, perhaps, pass up the IRA and invest the $5,500 in solid growth stocks that she can purchase and hold for the long-term.

F. None of the other answers is correct