Reese is comparing retirement plans with prospective employers. ABC, Inc., offering a salary of $58,000, will match 75 percent of his contributions up to 10 percent of his salary, his maximum contribution. XYZ company will match 100 percent of this contribution up to 6 percent of salary, but he can contribute up to 15 percent of his income. XYZ Company is offering a $54,000 salary. If Reese assumes that he will contribute the maximum amount allowed and keep these first-year retirement funds invested for 30 years with a 9 percent return, how much would each account be worth? ABC Total Contribution ABC Future Value of Contribution XYZ Total Contribution XYZ Future Value of Contribution Choose... Choose... + Choose... # Choose. 4
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- Matthew is considering several possible compensation alternatives for services he has provided as a consultant: Option A: Matthew could receive $8,000 today. Option B: Matthew could receive $2,500 at the end of each of the next four years. Option C: Matthew could receive $12,000 five years from now. Required: Calculate the present value for each option assuming that Matthew can earn 7 percent on any investment funds. Which option results in the greatest financial benefit to Matthew? If Matthew earns 10 percent, will that change your answer to # 2 above? Please explain.A client needs assistance with retirement planning. Here are the facts: The client, Dave, is 21 years old. He wants to retire at 65. Dave has disposable income of $2,000 per month. The IRA Dave has chosen has an average annual return of 8%. Question 1. If Dave contributes half of his disposable income to the account, what will it be worth at 65? Question 2. How much would he need to contribute to have $5,000,000 at 65?You have been hired as a benefit consultant by Jean Honore, the owner of Sweet Angels. She wants to establish a retirement plan for herself and her three employees. Jean has provided the following information. The retirement plan is to be based upon annual salary for the last year before retirement and is to provide 50% of Jean's last-year annual salary and 40% of the last-year annual salary for each employee. The plan will make annual payments at the beginning of each year for 20 years from the date of retirement. Jean wishes to fund the plan by making 15 annual deposits beginning January 1, 2025. Invested funds will earn 11% compounded annually. Information about plan participants as of January 1, 2025, is as follows. Jean Honore, owner: Current annual salary of $49,990; estimated retirement date January 1, 2050. Colin Davis, flower arranger: Current annual salary of $37.190; estimated retirement date January 1, 2055. Anita Baker, sales clerk: Current annual salary of $20,900;…
- "Robin is considering taking the 25% match up to 11% match offered by their employer's 401(k) plan. If they plan to save 3.0% of their $94,000 annual gross salary, how much will they receive in a match from their employer this year?"Bob's Burger Buns, Inc. is installing a brand new defined benefit pension plan. Bob is age 55 and will retire at age 65. The next oldest employee is age 35 and will retire in 30 years. Bob has a low risk tolerance. The average tenure of the rank-and-file employees is three years. Examine each of the following portfolios and decide which of the three would be the best choice to fund the plan. Justify your response in terms of the owner's risk tolerance level, inflation protection level, UBTI concerns, and compliance with ERISA diversification requirements: Portfolio 1: 70% invested in U.S. government Treasury securities with various maturities; 20% invested in a municipal bond fund; and 10% invested in a money market fund invested un U.S> Treasury bills. Portfolio 2: 40% invested in an aggressive growth mutual fund; 20% invested in certificates of deposit; 20% invested in financial futures; and 20% invested in a gold and other precious metals mutual fund. Portfolio 3: 40%…You have been hired as a benefit consultant by Jean Honore, the owner of Pina Angels. She wants to establish a retirement plan for herself and her three employees. Jean has provided the following information. The retirement plan is to be based upon annual salary for the last year before retirement and is to provide 50% of Jean's last-year annual salary and 40% of the last-year annual salary for each employee. The plan will make annual payments at the beginning of each year for 20 years from the date of retirement. Jean wishes to fund the plan by making 15 annual deposits beginning January 1, 2025. Invested funds will earn 11% compounded annually. Information about plan participants as of January 1, 2025, is as follows. Jean Honore, owner: Current annual salary of $51,900; estimated retirement date January 1, 2050. Colin Davis, flower arranger: Current annual salary of $37,230; estimated retirement date January 1, 2055. Anita Baker, sales clerk: Current annual salary of $19,700;…
- Julie has just retired. Her company’s retirement program has two options as to how retirement benefits canbe received. Under the first option, Julie would receive a lump sum of $150,000 immediately as her fullretirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lumpsum payment of $60,000 at the end of the 20-year period.Required:If she can invest money at 12%, which option would you recommend that she accept? Use present valueanalysis.Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $130,000 immediately as her full retirement benefit. Under the second option, she would receive $19,000 each year for 5 years plus a lump-sum payment of $75,000 at the end of the 5-year period. Required: 1-a. Calculate the present value for the following assuming that the money can be invested at 11%. 1-b. If she can invest money at 11%, which option would you recommend that she accept? Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 If she can invest money at 11%, which option would you recommend that she accept? First option Second optionCarlos has an opportunity to save $205 per month at an APR of 4.55% in a 401K plan through work. He plans to retire In 20 years. The income taxes are at 30% for him. (1) If Carlos's company offers a 35% matching contribution, how much would the company contribute to Carlos's 401K by the time he retires? (Express your answer rounded correctly to the nearest cent) (2) If Carlos's company offers a 35% matching contribution, use Excel's FV function to determine how much his Investment will be worth when he retires. (Express your answer rounded correctly to the nearest cent) (3) How much will Carlos have deposited into the account by the time he retires? (Express your answer rounded correctly to the nearest centi) %24
- Malcolm knows about the Old Age Security (OAS) pension clawback but is unsure how to calculate if for him and his wife. In 2020, the OAS pension is clawbacked or reduced by 15% above $79,054. Malcolm and his wife are both receiving monthly pensions of $613.54. His net income is $130,000 while his wife's net income is $85,000. What is the total amount they have to repay in 2020? Minimum Income Recovery Threshold Maximum Income Recovery Threshold $79,054 $8,254 $14,725 $892 $13,833 $7,362 $128,137You and your best friend, Angelo started working at Microsoft at the same time last year on January 1, 2022. You know that he is much stronger than you at negotiating and you believe he makes more money than you. This is the first job for both of you and neither of you joined the company pension plan. You have asked him for his salary but he refuses to tell you. He has however told you that he made the maximum Registered Retirement Savings Plan (RRSP) contribution on January 1, 2023, in the amount of $16,200. Both of you have not yet received a raise since starting at Microsoft. What is Angelo's salary? Select one: O a. $85,000 O b. $72,000 O c. $75,000 O d. $80,000 O e. $90,000Fred Balm has agreed to work for the Cadenford Foundation at a total annual salary of $58,000. He is uncertain whether he should be paid bi-weekly or semi-monthly and has asked for your assistance. Calculate the typical deductions for CPP and El that must be taken from Fred's salary under either alternative. Will the choice affect the total El or CPP Fred pays during the year? Complete the table below. (Round your answers to the nearest cent.) Bi-weekly CPP = El = Semi-Monthly. CPP = El = Will the choice affect the total El or CPP Fred pays during the year? (Select the correct choice and, if necessary, fill in the answer boxes within your choice.) O A. No. The amount Fred pays is not affected because the total bi-weekly deductions per pay period multiplied by pay periods is approximately equal to the total semi-monthly deductions per pay period multiplied by pay periods. O B. Yes. The amount Fred pays is not affected because the total bi-weekly deductions per pay period multiplied by…