Maria, age 42, just resigned from Bygone Corporation to accept a new job with Future, Inc. Bygone
Question:
Maria, age 42, just resigned from Bygone Corporation to accept a new job with Future, Inc. Bygone informed Maria that she has a $38,000 balance in its qualified retirement plan and wants to know if she plans to roll over this balance into another plan or prefers to receive a lump-sum payment. Maria is in the 24 percent marginal tax bracket and would like to buy a new car with the funds although the local car dealer is currently offering very attractive low-interest financing. Determine the amount of after-tax funds Maria would have available to pay for the car if she takes a lump-sum distribution, and make a recommendation regarding what you think she should do.
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Step by Step Answer:
Taxation For Decision Makers 2019
ISBN: 9781119497288
9th Edition
Authors: Shirley Dennis Escoffier, Karen A. Fortin