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Facts: You estimate annual earned income from your employer at S60,000 plus a $3,000 bonus. In addition, you project $150 in interest and $300 in ordinary dividends. The maximum your employer will contribute to your traditional 401(k) plan is 50 cents for each dollar you contribute up to a maximum employer contribution of 3% of your annual earned income. Personal Goal: Save 15% of your annual earned income. Determine for each of two your after-tax contribution (out-of-pocket cost) to save that 15%. Scenarios Seenario 1: 1. What is the maximum amount your employer will contribute to your traditional 401(k) plan. 2. To get the employer's maximum contribution, how much will you need to contribute to your traditional 401(k) plan?........ 3. Assuming you and your employer contribute these amounts, what will be the total contribution to your 401(k)?.. 4. How much of your contribution is tax deductible to you?..s 5. If you are in the 22% federal tax bracket, how much of your total contribution will you save in taxes?.. 6. Of the total contribution (#3 above), how much after federal taxes came out of your pocket?.. 7. What percentage (%) of the total contribution to your 401(k) (#3) was your after tax cost?.. 8. If your goal is to save 15% of your earned income, how much will you have to save to reach your goal?. 9. How much is already being saved in your 401(k) plan? 10. How much more will you need to save to meet your goal?..S 11. If you add the amount in #10 to your 401(k) plan, what is your out-of-pocket cost after deducting your 22% tax saving?... 12. Including this additional amount, what is the total combined contribution of all parties to your 401(k) account.. 13. How much is your total after tax contribution to save 15%? S_ 14. How much is being contributed by other parties?. S 15. What % was contributed by other parties?. 16. What % was contributed by you on an after tax basis?. % Facts: You estimate annual earned income from your employer at S60,000 plus a $3,000 bonus. In addition, you project $150 in interest and $300 in ordinary dividends. The maximum your employer will contribute to your traditional 401(k) plan is 50 cents for each dollar you contribute up to a maximum employer contribution of 3% of your annual earned income. Personal Goal: Save 15% of your annual earned income. Determine for each of two your after-tax contribution (out-of-pocket cost) to save that 15%. Scenarios Seenario 1: 1. What is the maximum amount your employer will contribute to your traditional 401(k) plan. 2. To get the employer's maximum contribution, how much will you need to contribute to your traditional 401(k) plan?........ 3. Assuming you and your employer contribute these amounts, what will be the total contribution to your 401(k)?.. 4. How much of your contribution is tax deductible to you?..s 5. If you are in the 22% federal tax bracket, how much of your total contribution will you save in taxes?.. 6. Of the total contribution (#3 above), how much after federal taxes came out of your pocket?.. 7. What percentage (%) of the total contribution to your 401(k) (#3) was your after tax cost?.. 8. If your goal is to save 15% of your earned income, how much will you have to save to reach your goal?. 9. How much is already being saved in your 401(k) plan? 10. How much more will you need to save to meet your goal?..S 11. If you add the amount in #10 to your 401(k) plan, what is your out-of-pocket cost after deducting your 22% tax saving?... 12. Including this additional amount, what is the total combined contribution of all parties to your 401(k) account.. 13. How much is your total after tax contribution to save 15%? S_ 14. How much is being contributed by other parties?. S 15. What % was contributed by other parties?. 16. What % was contributed by you on an after tax basis?. %

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