Chapter 14 Financial Planning Exercise 7 Effective after-tax cost of 401(k) contribution Luis Gomez is an operations manager for a large manufacturer. He earned $74,500 in 2018 and plans to contribute the maximum allowed to the firm's 401(k) plan. Assuming that Luis is in the 25 percent tax bracket, calculate his taxable income and the amount of his tax savings. Assume an individual employee can put as much as $18,500 into a tax-deferred 401(k) plan. The standard deduction for 2018 is $12,000. If necessary, round the answer for tax savings to the nearest cent. Taxable income Amount of his tax savings How much did it actually cost Luis on an after-tax basis to make this retirement plan contribution? If necessary, round the answer to the nearest cent. $