Raul and Jenna Are Married and Are Both Working

question 674

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 $193,000 of AGI for 2018.
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 savi

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Definitions:

Sealed-bid

A bidding process where all the bids are kept confidential until a designated opening time, preventing bidders from seeing competitors' bids.

Auctions

A public sale process where goods or services are sold to the highest bidder.

Common-value Auction

An auction format where the item for sale is of the same value to all bidders, but the bidders may have different information about the item's actual value.

Oral Auctions

Competitive bidding events where bids are made verbally in real-time, often conducted by an auctioneer.