Raul and Jenna Are Married and Are Both Working

question 97

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 $187,000 of AGI for 2015.
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:

Psychological Study

The scientific research or investigation into human mind and behavior, exploring various aspects such as cognition, emotion, and social interactions.

Reactance

A motivational reaction to restrictions on personal freedom, manifesting in an urge to regain that freedom.

Accomplice Behavior

The actions taken by an individual who helps another to commit a crime or wrongful act.

Experimental Realism

The extent to which the conditions of an experiment mimic the real-world scenarios they aim to replicate or study, affecting the validity of the outcomes.