A saver who expects to have a higher tax rate after retirement would prefer a ________.

Question

Quizplus · Accepted Answer

A saver who expects to have a higher tax rate after retirement would prefer a Roth retirement plan because contributions are taxed upfront, but withdrawals are tax-free in retirement. This would be beneficial if the saver's tax rate is expected to be higher during retirement than it is now. The other options, traditional retirement plans (B), 401k plans (C), and 403b plans (D), are taxed upon withdrawal in retirement, which may not be as beneficial for someone with a higher tax rate at that time.

A Saver Who Expects to Have a Higher Tax Rate