Raul and Jenna Are Married and Are Both Working

question 28

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 $185,000 of AGI for 2014.
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:

Affirmative Singular Proposition

A statement that positively asserts the existence or some characteristic of a single specific subject.

Distributed

A term in logic referring to when all instances of a subject are accounted for in a statement.

I Proposition

In traditional logic, an affirmative proposition making a claim that some subject is part of the extension of some predicate, as in "Some S are P."

Distributed

In logic, refers to a term that applies to all members of the category it describes.