How Much Money Will Carlos Have After Withdrawing from His Roth IRA?

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Homework Help Overview

The problem involves calculating the amount of money Carlos will have after withdrawing from his Roth IRA, considering his age, tax bracket, and account balance. The subject area relates to personal finance and tax implications of retirement accounts.

Discussion Character

  • Exploratory, Assumption checking

Approaches and Questions Raised

  • The original poster attempts to apply a formula for calculating post-tax earnings but questions the validity of their result. Other participants inquire about the basis for the original poster's uncertainty regarding their answer.

Discussion Status

Participants are exploring the implications of the original poster's calculation and discussing potential reasons for discrepancies with a web-based program's feedback. Suggestions have been made regarding formatting and rounding expectations for the answer.

Contextual Notes

There is mention of a web-based program that evaluates the correctness of the answer, which may impose specific formatting or rounding rules that are under discussion.

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Homework Statement


Carlos is 60 years old, is in the 32% marginal tax bracket, and has $544,000 in his Roth IRA. How much money will he have after taxes if he withdraws all the money from the account?


Homework Equations


(1-tax bracket)x(amount)=earnings after income tax

The Attempt at a Solution


I did (1-.32)(544000)=369920, but I know that's not the right answer. What am I doing wrong?
 
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How do you know that's not the right answer?
 
Mark44 said:
How do you know that's not the right answer?

It's a homework problem on a web-based program that tells you whether or not you are right.
 
I hate those things! Assuming your formula is correct, your answer is completely correct. Perhaps the web based program is expecting the answer as "$369,920" and is counting it wrong because of either the missing "$" or the missing ",".
 
They could also be expecting an answer rounded to the nearest $0.01, not the nearest $1.
 

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