n 2022, Nitai (age 40) contributes 10 percent of his $119,000 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 10 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 25 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)
n 2022, Nitai (age 40) contributes 10 percent of his $119,000 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 10 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 25 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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Qw.22.
Transcribed Image Text:In 2022, Nitai (age 40) contributes 10 percent of his $119,000 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 10 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 25 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)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education