Retirement planning-what are savings at? retirement

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Retirement Planning. Tilly would like to invest ?$2500 in? before-tax income each year in a retirement account or in stock investments outside the retirement account. Tilly likes the stock investments outside the retirement account because they provide her with more flexibility and a potentially higher return. Tilly would like to retire in 35 years. If she invests money in the retirement? account, she can earn 6 ?% annually. If she invests in stock outside the? account, she can earn 7 ?% annually. Tilly is in the 25 ?% marginal tax bracket.

a. If Tilly invests all her money in the retirement account and withdraws all her income when she? retires, what is her income after? taxes?

b. If Tilly invests all her money in stocks outside the? account, what are her savings at? retirement?

c. Assuming a capital gains tax rate of 15 ?%, what is the? after-tax value of the stock? investments?

d. Should Tilly invest her money in the retirement account or in stocks outside the? account?

Reference no: EM131931964

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