Team Members Team 6

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Team MembersTeam 6

• James Ayoub
• Michael Pan
• Melissa Sy
• James Traylor

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401K vs. Roth IRA

• Introduction
• Project Outline
• Results
• Conclusion

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401K vs. Roth IRA

• 401K
• Tax-Deductible
• Contribution limit is 15,500
• Withdrawals are fully Taxable

• Roth Ira
• Non Tax-Deductible
• Contribution limit is 5000
• Tax-free Withdrawals

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Assumptions Made

• Equal contributions to both plans
• Roth IRA ineligibility ignored
• Flat tax (not tiered)
• Annual salary raises kept up with inflation at 3
• ROR is 10
• No 401K matching from employer
• No Social Security Benefits
• No investment fees
• 35 working years

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Subject

• 25 year old Engineer
• Starting Salary 50,000
• Male
• Secret identity Clark Kent
• Allergic to Kryptonite
• Favorite Colors Red Blue

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Results
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Conclusion

• From our default assumptions our analysis
  concludes that the 401K is a better plan than the
  ROTH IRA.

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Resources

• www.moneychimp.com
• (great for tax rates)
• www.mutualfundsabout.com
• (Contribution limits to retirement plans)
• www.fool.com
• (general information on plans)

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Questions?