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?

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Definitions:

Organization Size

The scale or extent of an organization, typically measured by the number of employees, revenue, or operational scope.

Matrix Departmentation

Employees remain members of a functional department while also reporting to a product or project manager.

Functional Department

A specialized unit within an organization focusing on a specific function or area, like marketing or finance.

Product Team

A group of professionals working together to develop, manage, and deliver a product or service.