John is a single professional living in Brooklyn amd works at the XYZ company as a webpage designer. His annual salary is $85,000 a year. His company offers a 401 k retirement savings benefit, and it matches up to 6% of the participating employee's salary. John wants to participate in the program because it gives many benefits. including the additional 6% money toward retirement savings. He wants to figure out how much contribution to the 401 k plan would maximize his tax benefits and the company's match. He needs at least $2300 per month for his living expenses.

Suppose that you are his CFA. How much annual contribution would you suggest to him?

Answer rating: 100% (QA)

As John wants to maximize his tax benefits and the companys match we need to calculate the contribut... View the full answer