Raul and Jenna Are Married and Are Both Working

question 95

Essay

Raul and Jenna are married and are both working.They are both over age 50.Jenna participates in her employer's Sec.401(k)plan and makes the maximum contribution and enjoys a company matching contribution.Raul's employer does not maintain a retirement plan so he would like to save as much as possible in a tax-advantaged manner for retirement.They expect to report $188,000 of AGI for 2016.
a.What is the maximum amount that Raul can contribute to a traditional IRA and how much can he deduct?
b.What is the maximum amount that Raul can contribute to a Roth IRA and how much can he deduct?
c.How could Raul contribute to both the traditional IRA and Roth IRA to maximize current and future tax savings?

---

Definitions:

Rationalists

Philosophers or thinkers who emphasize reason, logic, and intellect over sensory experience or empirical evidence as the primary sources of knowledge.

Coherence

The property of being a unified whole, with all elements fitting together well.

Rationality

The quality of being based on or in accordance with reason or logic; typically applied in the context of human decision-making processes that are logical, sensible, and based on clear thinking or reason.

Synthetic A Priori

A concept in epistemology that denotes judgments that are derived independently of experience while still providing new knowledge.