Question
You started your 401 (K) retirement account 40-years ago with a deposit of $1,800. The account is now worth $57,231. You are retired and are
You started your 401 (K) retirement account 40-years ago with a deposit of $1,800. The account is now worth $57,231. You are retired and are now required to withdraw some of the money from the account. Below is the current tax situation:
Your current tax bracket = 30%
Long-term Capital Gains Tax Rate = 18%
1. What was the annual rate of growth in the value of your 401 (k) account?
2. What are the taxes owed if you withdraw $22,000 of the funds from your 401 (k) the account?
A - 12.22% Growth Rate; $6,600 in taxes owed
B - 12.22% Growth Rate; 3,960 in taxes owed
C - 9.03% Growth rate; $3,960 in taxes owed
D - 9.03% Growth rate; $6,600 in taxes owed
E - 10.39% Growth rate; $3,960 in taxes owed
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