Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You just graduated and started your new job. Your starting salary is $50,000/year. Your employer's 401(k) plan states that your employer will contribute 3% of
You just graduated and started your new job. Your starting salary is $50,000/year. Your employer's 401(k) plan states that your employer will contribute 3% of your salary to your 401(k) regardless of whether you make any contributions or not. They will also match your contributions, $1 for $1, up to 4% of your salary. Please answer the following questions: How much ($) will your employer contribute to your 401(k) per year if you make $0 contributions. $ 1,500 What is the minimum amount ($) that you must contribute per year to get the maximum match from your employer? $2,000 Assume that you make the minimum contribution to get the maximum match from your employer. What is the total amount ($) that will be contributed to your 401(k) for the year, including all of the employer contributions and your contributions? $ 6,500 Assume that this annual total contribution is made for 35 years and your 401(k) earns an average annual return of 6%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or your answer will be marked as "incorrect". After doing a budget, you realize that you can make a contribution of $3,000 per year to a Roth IRA, in addition to the total contributions to your 401(k) - including your employer's total contributions. Assuming the same annual rate of return and number of years to retirement as above, how much will you have your accounts (4019k) and Roth IRA) when you retire? Assume Beginning of Period payments. Round your answer to the nearest dollar - do NOT enter any cents or your answer will be marked as "incorrect
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