Question

Mickey is 40 years old and has his retirement savings in a 401(k). If he makes $55,000 annually, what is the maximum percentage of his income that he can contribute to his 401(k) plan per year? (The current maximum contribution limit is $16,500.)

Answer 1

the answer will be 30%

Answer 2

30%.

Explanation:

We have been given that Mickey makes $55,000 annually and the current maximum contribution limit to 401(k) plan is $16,500. We are asked to find the maximum percentage Mickey can contribute of his 401(k) plan.

To find the maximum contribution percentage, we need to figure out $16,500 is what percent of $55,000.

`\text{The maximum contribution percentage}=(\$16,500)/(\$55,000)* 100`

`\text{The maximum contribution percentage}=0.30* 100`

`\text{The maximum contribution percentage}=30\%`

Therefore, Mickey can contribute 30% of his annual income to his 401(k) plan at maximum.