Jay is 27 and Nicky is 26. Although they are still young, they wish to plan for their retirement together when Jay is 65. By investing mostly in index funds, they hope to obtain a return on their retirement investments of 10%, which the market has done on average over the last 80 plus years.
a. If they save $4,600 at the end of each year in a Roth IRA for each of them from now until Jay retires, how much will they have in their Roth IRA’s alone for their golden years?
b. Would they owe any taxes on the funds as they withdrew them (Under current tax laws)?