Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In 2021, Nitai (age 40) contributes 10 percent of his $123,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated
In 2021, Nitai (age 40) contributes 10 percent of his $123,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10 percent of the employee's salary. Nitai expects to earn a 4 percent before-tax rate of return. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no additional contributions to either account. What are Nitai's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Roth 401(k) Traditional 401(k) After tax proceeds from distribution
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started