10. Benefits of traditional and Roth 401(k) plans

Traditional 401(k) versus Roth 401(k)

Kenji has decided to contribute to a savings program. He can open a traditional 401(k) or a Roth 401(k) and has determined that he can afford a $14,400 contribution. Kenjis salary is $106,500 per year, and he is in the 32% tax bracket.

If Kenji decides to go with a traditional 401(k), his contribution amount will be (______)

And the amount offset via a reduced tax bill will be (______)

If, instead, Kenji decides to go with a Roth 401(k), his contribution amount will be (______)

And the amount offset via a reduced tax bill will be (______)

Assuming all the same facts, suppose that Kenji decides to open both 401(k) plans, splitting what he can afford to contribute equally between both plans.

Under this scenario, Kenjis contribution amount will be (______)

And the amount offset via a reduced tax bill will be (______)

.When Kenji retires, which plans monies will he be able to exclude from taxable income? (Traditional 401k / Roth 401k)