Question
a. Kim has worked for one employer her entire career. While she was working, she participated in the employers defined contribution plan [traditional 401(k)]. At
a. Kim has worked for one employer her entire career. While she was working, she participated in the employers defined contribution plan [traditional 401(k)]. At the end of 2016, Kim retires and the balance in her defined contribution plan was $1,950,000 at the end of 2015. What is Kims minimum required distribution for 2016 if she turns 70 during 2016 and she has not turned 71 years old by the end of the 2016?
b. Matthew (48 at year-end) develops cutting-edge technology for SV, Inc. located in Silicon Valley. In 2016, Matthew participates in SVs money purchase pension plan (a defined contribution plan) and in his companys 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employees salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employees 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SVs contribution to the money purchase plan. Assuming Matthews annual salary is $250,000, what can Matthew contribute to his 401(k) account in 2016?
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