Kathleen, age 56, works for MH, Inc. in Dallas, Texas. Kathleen contributes to a Roth 401k and MH contributes to a traditional 401k on her behalf. Kathleen has contributed $21,000 to her Roth 401k over the past six years. The current balance in her Roth 401K account is $35,000 and the balance in her traditional 401k is $24,500. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleens retirement accounts assuming her marginal tax rate for ordinary income is 28%.

1. If Kathleen receives a $3,500 distribution from her traditional 401k account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

Net Distribution is _____________ ?

2. If Kathleen receives a $3,500 distribution from her Roth 401k account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

Net Distribution is _____________ ?

3. If Kathleen retires from MH and then she receives a $3,500 distribution from her traditional 401k, how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

Net Distribution is _____________ ?

4. If Kathleen retires from MH and then she receives a $3,500 distribution from her Roth 401k, how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

Net Distribution is _____________ ?

5. Assume the original facts except that Kathleen is 60 years of age not 56. If Kathleen receives a $3,500 distribution from her Roth 401k (without retiring), how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

Net Distribtuon is _____________ ?