Question

In: Finance

Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a...

Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and contributes 18% of employees salary to the profit sharing plan. There is no additional match. If the ADP of the NHCEs is 3%, what is the maximum that Dustin can defer this year (2020)?

a. $5,700

b. $14,250

c. $17,100

d. $19,500

Solutions

Expert Solution

Answer

A.5700

Whether you are nearing retirement or just startingyour career, it is always the right time to begin planning for yourfinancial future. If your employer offers a 401(k), it can be oneof the simplest and most effective ways to save for yourretirement. While thecheif advantage of this plan is that it allowsyou to defer a portion of your paycheck to your retirement accounteach month automatically, there are some limitations on how muchyou can save.

Each year, usually in October or November, the Internal RevenueService (IRS) reviews and sometimes updates the maximumcontribution limits and other retirement savings vehicles.Depending on your age and compensation level, you may be subject todifferent limits. Stay up-to-date on the most current regulationsto ensure you make the most of your employer-sponsored plan.

Dustin can defer $5700

The 2020 401(k) contribution limit. As I mentioned, the 401(k)contribution limit in 2020 is increasing by $500 over the 2017limit to $19500. This limit also applies to other qualifiedretirement plan types, such as 403(b) plans, most457 plans, and Thrift Savings Plan accounts

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a...
Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and contributes 18% of employees salary to the profit sharing plan. There is no additional match....
Predict the annual salary in dollars for females who are at least 25 years old with...
Predict the annual salary in dollars for females who are at least 25 years old with 15 years of education. Years of education            Annual Salary(in dollars) 18                                           52,866 16                                            40393 14                                          27062 12                                        21427 10                                        14470 15                                        41010 13                                         31376 18                                         79962 12                                         21387 16                                          39925 16                                         57815
Steven Pinker is a 48-year-old bank manager. His wife Carol, 43 years old, works part-time at...
Steven Pinker is a 48-year-old bank manager. His wife Carol, 43 years old, works part-time at a daycare. They have three children, 19-year-old Sam, 16-year-old Sarah and 14-year-old Michael. All three children live with them. Steven's only income during the year was $115,000 from employment, Carol earned $12,000 from the daycare, Sam earned $10,000 from his job at Starbucks and Sarah earned $4,000 working part-time at McDonald's. Carol's 72-year-old mother, Ethel, also lives with the family. Ethel had an income...
Renal question Olly is a 21 years old female who works as a teacher and leaves...
Renal question Olly is a 21 years old female who works as a teacher and leaves alone. Olly suspects she has developed food poisoning after consuming leftovers from a take away meal she had in her fridge from three days ago before she re-heated it for dinner. She has not been to work for 5 days due to severe vomiting, diarrhea and abdominal pain. Olly stated she has been feeling increasingly tired and weak and unable to tolerate oral fluids...
Mr. Stanley London is a 72 year old retired military sergeant who has a 48 years...
Mr. Stanley London is a 72 year old retired military sergeant who has a 48 years history of smoking 20 packs of cigarettes a year. He reported having a productive cough, hoarseness, and difficulty breathing. He said all these are happening to him because he is old. He has history of several primary malignancies including, multiple melanomas, and recurrent squamous cell carcinoma of the right lower and left upper lungs. Also, he is insulin dependent Type 2 diabetes Mellitus and...
Roth IRA Worksheet Lainey Wilkinson is a 36 years old individual who works at a local...
Roth IRA Worksheet Lainey Wilkinson is a 36 years old individual who works at a local library. She starts to invest $3,000 per year this year in a “Roth IRA”. For investments in a Roth IRA, you will never pay taxes on the interest/dividends/profits. Assume that her investments will make 8% annually until her retirement. I. How much will be there in Lainey’s IRA account when she retires at 66. II. Assuming that Roth IRA makes 7% annual return after...
Dorthy who is 55 years old, works as a financial analyst in Capital One bank. Her...
Dorthy who is 55 years old, works as a financial analyst in Capital One bank. Her monthly salary is $13,000. Dorthy is married to John who is 66 years of age and works as a salesman for a local car dealership. His monthly salary from the dealership is $8,500 per month but he has a very flexible schedule so he supplements his salary by accepting an employment in the evening at a high-end restaurant and earn $3,000 per month. They...
Jenny walker 48-years-old who has a history of diabetes and circulatory problems, underwent abdominal surgery several...
Jenny walker 48-years-old who has a history of diabetes and circulatory problems, underwent abdominal surgery several days ago and is now in the critical care unit. When you enter, she is slouched down in bed. Assessment reveals that her abdominal dressing is moist, and only part of the tape securing the dressing is adhering to the skin. Her level of consciousness is decreased, and she responds only to moderate touch and pain. With repositioning, she moans. Further assessment reveals the...
An individual is 48 years old. At the end of each​ month, hedeposits ​$300 in...
An individual is 48 years old. At the end of each month, he deposits $300 in a retirement account that pays 4.82% interest compounded monthly. (a) After 12 years, what is the value of the account? (b) If no further deposits or withdrawals are made to the account, what is the value of the account when the individual reaches age 65?After 12 years, the value of the account will be $
The age of all farmers are normally distributed with a mean 48 years old and standard...
The age of all farmers are normally distributed with a mean 48 years old and standard deviation 12 years old. Part A About  % of all farmers are older than 16 years old. (Rounding the percentage to 2 decimal places if possible) Part B About  % of all farmers are younger than 38 years old. (Rounding the percentage to 2 decimal places if possible) Part C About  % of all farmers are between 28 years old and 61 years old. (Rounding the percentage...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT