Kim (50 Years of Age)is Considering Whether to Participate in Her

question 62

Essay

Kim (50 years of age)is considering whether to participate in her company's Roth 401(k)or traditional 401(k).This year,she plans to invest either $4,000 in a Roth 401(k)or $5,000 in a traditional 401(k).Kim plans on leaving the contribution in the retirement account for 20 years when she will receive a distribution of the entire balance in the account.Her employer does not have a matching program for employee contributions to retirement accounts.Assume Kim can earn a 6 percent before tax return in either account and that she anticipates that in 20 years her tax rate will be 30%.(Round future value factors to 5 decimal places and the future value and final answers to the nearest whole number)
1)What would be Kim's after-tax accumulation in 20 years if she contributes $4,000 to a Roth 401(k)account?
2)What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

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Definitions:

Disablism

Discrimination or prejudice against individuals with disabilities, based on the belief that typical abilities are superior.

Unintended Negligence

A situation where harm is caused not through deliberate action but due to a lack of attention or foresight.

Age Stratification

Social inequality between age cohorts.

Social Inequality

Disparate opportunities and rewards are allocated to various social statuses or positions within a community or society.