Your employer provides a 401(k) retirement plan and matches 100% of your contributions up to 4%....

Your employer provides a 401(k) retirement plan and matches 100% of your contributions up to 4%. Your annual income is $90,000 and you expect to earn an annualized 7.0% return on your investment. What is the value of your 401(k) after 30 years if you contribute 4% of your annual income? What is the value if the return on investment is at a 5.0% annualized rate? How much of a difference would the 7.0% return scenario be if you stopped making contributions five years earlier?

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Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 8 months ago

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