-All the past surplus social security contributions have been split up by the federal government to pay for other government expenses
-Since 2008 (when Baby Boomers qualified for early retirement), the number of retirees has expanded rapidly and benefits being paid will increase rapidly
-In recent years, benefits being paid out of the social security fund have begun to exceed contributions to the fund; thus, the annual social security surplus will disappear
-Suppose that eventually the annual social security contributions into the fund amount to only 85% of annual social security benefits that need to be paid out; then the federal government will need to find new ways to finance the additional 15% of social security benefits
-Based on current birth rates and future retirement rates, it is projected that eventually there will be only two workers for each retiree
-With no changes to the system, eventually annual benefits paid to the retirees will greatly exceed contributions to the fund
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Terms in this set (107)
What would be the difference in the tax consequences of an $18,000 withdrawal from a Roth IRA versus a traditional IRA if $15,000 represents long-term capital gains, $2,000 is short-term capital gains, and $1,000 is interest? Assume a tax rate of 30% and a capital gains tax rate of 10%.
A) $5,200 more in taxes with a traditional IRA B) $4,800 more in taxes with a
traditional IRA C) $5,400 more in taxes with a traditional IRA D) $5,400 more in taxes with a Roth IRA