Your income is $75,000 per year. You cannot set up a ROTH IRA if you earn more than $95,000 per year. If your salary increases by 20% each year, how many more years (after this year) can you contribute before you no longer qualify to set up a ROTH account?

Question

Suarez

Business

24 June, 02:21

Your income is $75,000 per year. You cannot set up a ROTH IRA if you earn more than $95,000 per year. If your salary increases by 20% each year, how many more years (after this year) can you contribute before you no longer qualify to set up a ROTH account?

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Hawk · Answer 1

only one more year

Explanation:

Your income for the current year (year₀) = $75,000

Next year's income (year₁) = $75,000 x 1.2 = $90,000

Year 3's income (year₂) = $90,000 x 1.2 = $108,000

You will only be able to contribute to a ROTH account during the next year (year₁), since your income for year₂ will be higher than $95,000.