In 2018, Nina contributes 10 percent of her $100,000 annual salary to her 401(k) account.She expects to
Question:
In 2018, Nina contributes 10 percent of her $100,000 annual salary to her 401(k) account.She expects to earn a 7 percent before-tax rate of return. Assuming she leaves this (and any employer contributions) in the account until she retires in 25 years, what is Nina’s after-tax accumulation from her 2018 contributions to her 401(k) account?
a. Assume Nina’s marginal tax rate at retirement is 30 percent.
b. Assume Nina’s marginal tax rate at retirement 20 percent.
c. Assume Nina’s marginal tax rate at retirement is 40 percent.
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a 37992 computed as follows Beforetax contribution 10000 Times future value factor 107 ...View the full answer
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Related Book For 
Taxation Of Individuals And Business Entities 2019 Edition
ISBN: 9781259918391
10th Edition
Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver
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