Tax Advantaged Ways to Save Assignment Question 1: How the Vesting Schedule Affects Employee Assets An employee who separates from service prior to becoming 100% vested will forfeit the unvested portion of his or her account balance. The number of hours of service performed by the employee determines the employee's vesting service for each year. Assume an employee who performs at least 1,000 hours of service for a year is credited with one year of vesting service for that year. Vesting Schechile and Bmployee Assets A. The ABC Corporation's profit-sharing contributions are subject to the following graded schedule: ABC Corporation requires each employee to perform 1,000 hours each year in order to be credited with one year of vesting service. Larry, a part-time employee whose 401(0). eccount had total employer contributions of \$5.400 at the end 2013. Larry performed the following hours of service for these years: Larry resigned from ABC Corporation in January 2013. How much of the $5400 contributed by his employer is Larry entiled to take with him? If he contributed on his own as well, how much of his own contributions is Lary entitled to take? B. Instead of using the vesting table above, Larry's company had the following vesting schedule: - Year one: 0% vested - Year two: 25% vested - Year three: 50% vested - Year four: 75% vested - Year five: 100% vested Lary resigned from ABC Corporation in January 2013. How much of the $5400 is Iarry entitled to take with him using the schedule in part B rather than the one in part A? C. Now, assume that Larry's plan offers cliff vesting which follows the BRISA defined maximum limit for when an employee is fully vested. Knowing this, in what year is Iary fully vested? How much of the employer's contributions will Larry be able to take with him when he resigns? How much will Larry own prior to the time in which he is fully vested? Question 2. John works for ABC Company, which agrees to make a matching contribution of 50 cents on every dollar, up to 6% of each employee's compensation. A. John's compensation is $31,000 per year. If John contributes $2,000 from his paychecks throughout the year, how much in a match from the company will John receive? B. How much does John have to contribute to receive the maximum 6% contribution from the company? C. How much is John giving up in compensation if he chooses not to defer any compensation? Question 3. Jill eams $75,000 per year. Her employer offers both a Roth and a traditional 401(3) plan. Assume Jill is less than 50 years old. If she contributes the maximum allowable, how much will her taxable income be if she contributes to the traditional 401 (k)? If instead Jill contributes the maximum allowable, how will her taxable income be if she contributes to a Roth 401 (k)? Question 4. Jis a 38 yearold manager making $75,000 per year whose 40 -year old spouse does not work outside the home. What should J's spouse do to save for retirement in a taxadvantaged way