In 2022, Nitai (age 40) contributes 8 percent of his $134,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 8 percent of the employee's salary. Nitai expects to earn a 5 percent before-tax rate of return.. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 20 years and that he makes no additional contributions to either account. What are Nitai's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.) Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
In 2022, Nitai (age 40) contributes 8 percent of his $134,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 8 percent of the employee's salary. Nitai expects to earn a 5 percent before-tax rate of return.. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 20 years and that he makes no additional contributions to either account. What are Nitai's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.) Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 13-62 (LO 13-2) (Algo)
In 2022, Nitai (age 40) contributes 8 percent of his $134,000 annual salary to a Roth 401(k) account sponsored by his employer, AY
Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 8
percent of the employee's salary. Nitai expects to earn a 5 percent before-tax rate of return..
Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 20 years and that he makes no
additional contributions to either account. What are Nitai's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after
he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.)
Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
After tax proceeds from distribution
Roth 401(k)
Traditional
401(k)
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