Darren and Samantha are married and file a joint tax return. Darren earns $89,000 per year. He
Question:
Darren and Samantha are married and file a joint tax return. Darren earns $89,000 per year. He contributes 10% of his monthly salary to his Roth 401(k). His employer matches the first 4 percentage points of his contribution on a dollar-for-dollar basis. Darren is earning 9% (annual rate) on his investments in the Roth 401(k).
Samantha earns $101,000 per year. She contributes 15% of her monthly salary to a Roth 401(k). Samantha's employer matches the first 3 percentage points of her contribution on a dollar-for-dollar basis. Her employer matches the next 3 percentage points of her contribution on a 75 cents-per-dollar basis. She earns 11% (annual rate) on her investments in the Roth 401(k).
Darren and Samantha's marginal tax rate is 24%.
Darren and Samantha project that they will be in a 22% marginal tax bracket when they hit retirement age in 30 years.
South western Federal Taxation 2017 Essentials of Taxation Individuals and Business Entities
ISBN: 9780357109144
20th edition
Authors: William A. Raabe, David M. Maloney, James C. Young, Annette Nellen