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Who intend to begin saving money for retirement

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David and William are brothers who intend to begin saving money for retirement when each is exactly 25. Each brother intends to save $3,600 per year before taxes and invest the money to accumulate wealth and to supplement his income in retirement. Dan Plans to invest his savings into a Traditional IRA and anticipates an average annual return of 9%. Wayne plans to invest his savings into a Roth IRA account and also anticipates an average annual return of 9% Both brothers expect to have an annual income tax rate of 25% during their working years and also in their retirement years.

1) How much money will David invest per year after taxes into his traditional IRA Investment?

2) How much will David have in his Traditional IRA account at age 65?

3) If a 20 year annuity is purchased with this sum of money at age 65, how much annual income after taxes will be provided if the annuity contract has a 4% interest rate?

4) How much money will William invest per year after taxes into his Roth IRA Investment Account?

5) How much will William have in his Roth IRA Account at age 65?

6) If a 20 year annuity is purchased with this sum of money at age 65, how much annual income after taxes will be provided if the annuity contract has a 4% interest rate?

7) If both brothers postpone the start of their investment plans until age 35, how much will each have at age 65?

Reference no: EM131176446

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