Carlos has estimated that he will need about $145,650 in the first year of retirement (adjusted for inflation), but his wife is worried about being taxed on this income. Assuming they will pay 28% average tax rate, how much do they need to generate in pretax income for their first year's expenses?

Question

Quizplus · Accepted Answer

To find the pretax income needed, divide the after-tax income by (1 - tax rate). $145,650 / (1 - 0.28) = $202,292.

Carlos Has Estimated That He Will Need About $145,650 in the First