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2) Are you participating in your company's retirement plan? If not, not really? Every dollar you contribute could decrease taxable income and lower your taxes to boot. For example, most sufferers will adore the 25% federal tax rate, and let's guess that our state income tax rate is 3%. That gives us a marginal tax rate of 28%. We subtract.28 from 1.00 graduating from.72 or 72%. This considerably a non-taxable interest rate of some.6% would be the same return to be a taxable rate of 5%.
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