Question: If an individual employee, age 25, earning $45,000 per year has an opportunity to participate in an employer sponsored 401(k) tax sheltered retirement account with the employer matching the first $1,200 of annual contributions made by the employee, compute the following :
A. If the individual employee is the 25% marginal income tax bracket and invests $1,200 per year into the employer provided 401(k) tax sheltered retirement account, how much with the employee's monthly net pay after taxes be reduced as a result of the $1,200 investment into the 401(k)?
B. How much total per year will be invested into the employee's account, if the individual employee invests $1,200 per year and takes full advantage of the matching funds (include employee's and employer's contributions).
C. How much will the employee have in his or her 401(k) account in 20 years if a 9% average annual rate is earned on the account?
D. How much will the employee have in the 401(k) account in 30 years if a 9% average annual rate is earned on the account?
E. How much will the employee have in the 401(k) account at age 65 if a 9% average annual rate is earned on the account?