Group 5

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Singular Retirement Arrangement or Account. A duty advantaged game plan that permits ... aftereffect of Congress urging Americans to spare cash for retirement. ...

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Group 5 – Personal Investing Edward Gribble – Organizer Irving Lim – Techie Richard Vasquez – Summarizer EGR 403-03 Fall 2005

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Scenarios Invest cash into a Roth IRA. Put cash into a Traditional IRA. Put cash into a 401k record through boss. Which is more gainful utilizing the Future Value examination technique?

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Background Traditional IRA Individual Retirement Arrangement or Account A duty advantaged plan that permits income and deductible commitments to develop charge conceded. Roth IRA Started in 1998 as aftereffect of the Taxpayer Relief Act of 1997. Representative William V. Roth, Jr. 401K Started in 1978 as a consequence of Congress urging Americans to spare cash for retirement. Requires work with an organization that has a 401k program.

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Assumptions 25 years of age. $60,000 Starting pay. 5% yearly commitment. Retirement at age 65. $25,000 crisis withdrawal at age 50. 10% rate of profit for ventures. Compensation increments 10% at regular intervals for the initial 25 years. Boss does not add to 401k. Pre-retirement impose: 28% - Post-retirement assess: 25%

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Emergency Withdrawal Total Savings A 1 A 2 A 3 A 4 A 5 A 6 Cash Flow Diagram n = 41 years i = 10% A 1-6 = 5% of compensation

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Sensitivity Analysis (ROR)

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Sensitivity Analysis (Starting Salary)

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Sensitivity Analysis (Emergency Withdrawal)

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Sensitivity Analysis (Percent of Salary Contributed)

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Sensitivity Analysis (Percent Salary Raise)

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Conclusions A 401k arrangement will dependably be the most helpful arrangement, yet you should have a vocation which gives you this choice. A Roth IRA is, for all situations that we examined, the following best choice. In the event that your boss adds to your 401k arrangement, 401k is EASILY the best alternative.

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