Sean (Age 74 at End of 2013) Retired Five Years

question 26

Essay

Sean (age 74 at end of 2013) retired five years ago. The balance in his 401(k) account on December 31, 2013 was $1,700,000 and the balance in his account on December 31, 2014 was $1,800,000. Using the IRS tables below, what is Sean's required minimum distribution for 2014? $$\begin{array} { | c | c | l | } \hline \begin{array} { c } \text { Age of } \\\text { Participant }\end{array} & \begin{array} { c } \text { Distribution } \\\text { Period }\end{array} & { \begin{array} { c } \text { Applicable } \\\text { Percentage }\end{array} } \\\hline 70 & 27.4 & 3.65 \% \\\hline 71 & 26.5 & 3.77 \% \\\hline 72 & 25.6 & 3.91 \% \\\hline 73 & 24.7 & 4.05 \% \\\hline 74 & 23.8 & 4.20 \% \\\hline 75 & 22.9 & 4.37 \% \\\hline\end{array}$$

---

Definitions:

Normal Balance

The side (debit or credit) where increases are recorded for a particular type of account, reflecting the account's normal balance position in the accounting equation.

Financial Statement

Papers that present a summary of a company's financial status, covering the balance sheet, income statement, and statement of cash flows.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, which is used to increase the account.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, based on the accounting equation.