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In 2018, Nina contributes 11 percent of her $119,000 annual salary to her 401(k) account. She...

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Accounting

In 2018, Nina contributes 11 percent of her $119,000 annualsalary to her 401(k) account. She expects to earn a 5 percentbefore-tax rate of return. Assuming she leaves this (and anyemployer contributions) in the account until she retires in 25years, what is Nina’s after-tax accumulation from her 2018contributions to her 401(k) account?

a.) Assume Nina’s marginal tax rate at retirement is 30percent.

b.) Assume Nina’s marginal tax rate at retirement is 20percent.

c.) Assume Nina’s marginal tax rate at retirement is 40percent.

Answer & Explanation Solved by verified expert
3.9 Ratings (582 Votes)
Solutiona Assume Ninas marginal tax rate at retirement is 30percent13298 Computed as followsBefore tax contribution13090Times future value factor    See Answer
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