Mr Paul, Age 73 and Single, Earned a $150,000 Salary

question 96

Multiple Choice

Mr Paul, age 73 and single, earned a $150,000 salary (AGI) as a university professor. He no longer participates in the university's qualified retirement plan. Which of the following is true?

• A) Mr. Paul can make a $6,500 deductible contribution to a traditional IRA.
• B) Mr. Paul can make a $6,500 nondeductible contribution to a traditional IRA.
• C) Mr. Paul can make a $6,500 nondeductible contribution to a Roth IRA.
• D) Mr. Paul can't make an IRA contribution.

Understand the concept of the time value of money.

Calculate the required savings for future goals.

Understand the impact of frequency of compounding on investment growth.

Apply financial formulas to real-life scenarios.

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Definitions:

Temporary Aid

Financial or material assistance provided on a short-term basis to support individuals in times of crisis or immediate need.

Medicare

A federal health insurance program in the United States primarily for people age 65 and older, but also available for certain younger people with disabilities.

Means-Tested

A method of determining eligibility for certain types of financial aid, benefits, or services based on the individual's or family's income and assets.

Poverty Threshold

The basic income level deemed sufficient for a suitable standard of living in a specific country.