Solve problems about finance / need it within 24 hrs

Chapter13RetirenemntPlanningAssignment.docx

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1) Marisa and Jennifer both attempted to put away $10,000 a year toward savings. Marisa used a 401(k) pension plan while Jennifer tried to do the same but was forced to pay taxes on that $10,000 in savings each year. Assuming that the process was the same each year for 40 years, how much will Marisa and Jennifer have at the end of the period, assuming identical investments providing pretax returns of 10 percent annually? The marginal tax brackets for both are 35 percent overall and for Jennifer’s investments 27 percent due to blending income with favorable capital gains rates. (Note: Be sure to use after-tax figures for Jennifer’s deposits and investment returns.)  

2) Kenneth was considering whether to place $10,000 in a tax-deferred annuity or a tax-free municipal bond. Assume the municipal returned 5 percent a year and the tax-deferred annuity 6 percent. Calculate approximately how long he would have to hold the annuity so that, if he withdrew the money and paid taxes on it, he would come out ahead. His marginal tax rate is 35 percent.  

3. What is the major difference between pre- and post-retirement planning?

4. What is withdrawal risk?

5. A pension plan that may be used for retirement but whose deposits are generally not eligible to receive a tax deduction is known as a: