The Maximum Contribution That Can Be Made on Behalf of an Employee

question 55

Multiple Choice

The maximum contribution that can be made on behalf of an employee in a Keogh defined contribution money purchase plan is:

• A)The lower of 15% of employee's taxable compensation or $53,000
• B)The lower of 13.0435% of employee's taxable compensation or $53,000
• C)The lower of 20% of employee's taxable compensation or $53,000
• D)The lower of 25% of employee's taxable compensation or $53,000

---

Definitions:

Rising Income Levels

An economic condition characterized by a general increase in the income received by individuals or populations over time.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, offering financial protection against high healthcare costs.

Wage Rate

The fixed amount of money or compensation paid to an employee by an employer in return for work performed.

Capital

Refers to wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.