1. Lisa is enrolled in a defined benefit plan. She has worked 6 years for the plan....
Question:
1. Lisa is enrolled in a defined benefit plan. She has worked 6 years for the plan. Her salaries were $25,000, $30,000, $35,000, $40,000, $45,000, and $50,000. The defined benefit plan allows for a benefit of 3% for every year of service of their average salary for their three highest years. The company uses a 7-year vesting schedule. What annual benefit has Lisa vested? (also known as her taxable benefit)
2. Sherry, age 34, participates in a defined contribution plan. The plan uses 5-year cliff vesting. She has worked at her employer for 3 years. In total, she has made employee contributions of $30,000. Her employer has matched 70% and made an additional $21,000 contribution. Sherry decides to close the plan and fully withdraw everything. How much does Sherry's tax increase due to this withdrawal? She is in the 24% marginal tax bracket.
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe