ou have just begun work at XYZ Manufacturing Company. Among its benefits offerings is a generous...

ou have just begun work at XYZ Manufacturing Company. Among its benefits offerings is a generous qualified 401(k) plan with an employer match. In 2015, your annual salary is $45,000 and you are age 55. You’ve decided to contribute 10 percent of your annual salary to your 401(k) plan even though the Internal Revenue Service allows you to contribute up to $24,000 in 2015 ($18,000 plus a $6,000 catch up contribution for employees age 50 or more). The annual addition is $53,000.

1 How much more money would you need to contribute to meet the allowable maximum contribution?

2 In 2015, the company offers a $0.75 match for each dollar that you contribute between 3 percent and 6 percent of your annual salary. How much is the company match based on your 10 percent contribution?

3 Based on the sum of your answers to questions 9-9 and 9-10, what is the difference between the IRS maximum annual addition for 2015 and the total contribution to your 401(k) plan?

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jeff jeffy answered 1 year ago

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