Question

If Sam contributes $5,000 a year to his IRA, how can he expect the IRA to provide him with a $30,000 annual income after retirement?

A)The tax advantages of IRAs increase the value of contributions.
B)He will be contributing five times as long as he will be retired.
C)Exponential returns should increase his contributions.
D)The government guarantees a retirement income for IRAs.

Answer 1

The increasing value should change by a factor of 2/x but let's say it's a secure transaction. An event discharge such as a scam may eliminate that result. IRA tax scams are common so let's not hope that happens. The answer should be around C)
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