In 2022, Nital (age 40) contributes 10 percent of his $100,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10 percent of the employee's salary. Nital expects to earn a 7 percent before-tax rate of return. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no additional contributions to either account. What are Nital's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1. Table 2) Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. After tax proceeds from distribution Roth 401(k) Traditional 401(k)
In 2022, Nital (age 40) contributes 10 percent of his $100,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10 percent of the employee's salary. Nital expects to earn a 7 percent before-tax rate of return. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no additional contributions to either account. What are Nital's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1. Table 2) Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. After tax proceeds from distribution Roth 401(k) Traditional 401(k)
Chapter4: Income Exclusions
Section: Chapter Questions
Problem 42P: Tia is married and is employed by Carrera Auto Parts. In 2019, Carrera established high-deductible...
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Transcribed Image Text:In 2022, Nitai (age 40) contributes 10 percent of his $100,000 annual salary to a Roth 401(k) account sponsored by his employer, AY
Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10
percent of the employee's salary. Nital expects to earn a 7 percent before-tax rate of return.
Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no
additional contributions to either account. What are Nital's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after
he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1. Table 2.)
Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
After tax proceeds from distribution
Roth 401(k)
Traditional
401(k)
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