Evaluate Tax-Efficient Retirement Strategies Practice Test

An individual taxpayer, age 69, is retired and has a traditional individual retirement arrangement and a Roth individual retirement arrangement. She anticipates that her taxable income will increase materially at age 73 due to required minimum distributions and Social Security benefits. She needs $30,000 this year for expenses and wants to reduce future required minimum distributions and related tax impact. What is the most tax-efficient withdrawal strategy?

An individual taxpayer, age 57, has wages of $200,000 and participates in an employer 401(k). He expects lower taxable income in retirement and is deciding whether to contribute to a traditional individual retirement arrangement or a Roth individual retirement arrangement (assume he is otherwise eligible). Considering the tax deductibility of traditional individual retirement arrangement contributions (subject to limitations) and the tax-free nature of qualified Roth distributions, based on the client's income and expected retirement tax bracket, which retirement account should contributions be directed to?