George Clausen (age 48) is employed by Kline Company and is paid an annual salary of $42,640.
Question:
George Clausen (age 48) is employed by Kline Company and is paid an annual salary of $42,640. He has just decided to join the company's Simple Retirement Account (IRA form) and has a few questions. Answer the following for Clausen:
a.What is the maximum that he can contribute into this retirement fund?
b.What would be the company's contribution?
Note: For items c. & d. below, round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places.
c.What would be his weekly take-home if he contributes the maximum allowed retirement contribution (married, 2 allowances, wage-bracket method, and a 2.3% state income tax on total wages)?
d.What would be his weekly take-home pay without the retirement contribution deduction?