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Isabers employer has recently announced that employees may convert traditional 401(k) plans to Roth 401 (k) plans if they so desire. Isabel decides to investigate

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Isabers employer has recently announced that employees may convert traditional 401(k) plans to Roth 401 (k) plans if they so desire. Isabel decides to investigate the option. She believes her tax bracket won't change from her working years into her retirement. In addition, she'd like to have more take-home pay now. Should Isabel keep the traditional 401(k) plan or switch to a Roth 401k plan? Use Isabel's calculations and your knowledge about these plans to explain your recommendation. Traditional 401() Gross salary = $3.000 Gross salary = $3 000 Contribution = $200 Tones 53 000 25% Taxes =12.800 0 75k 1750 Adjusted solay = $3,000 - $750 $3,000 700 - 52,100 $2,250 Take home Contribution = $200 $2,250 - $200 - $2,050 Take-home

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