You have just started a new job and are thrilled to learn that your new employer...

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Advance Math

You have just started a new job and are thrilled to learn thatyour new employer offers a 401(k) retirement plan to its employees.Your annual salary is $40,000. Assume the IRS allows you tocontribute up to $24,000 to your 401(k). You’ve decided tocontribute 7% of your annual salary to the plan.
Questions:
How much more money would you need to contribute to meet themaximum allowable contribution set forth by the IRS?
The company offers you a $.50 match for each dollar that youcontribute between 2 and 5 percent of your annual salary. How muchis the company match based on your 7% contribution?
Is this a defined benefit plan or defined contribution plan?Why?

Answer & Explanation Solved by verified expert

4.3 Ratings (740 Votes)

Question 1 Here the IRS offers to contribute the maximum amount of 24000 per year And the employee salary is 40000 per year and he was decided to contribute 7 of the annual salary So See Answer

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