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Delores, age 46, earns $47,000. What is the maximum contribution to her defined contribution plan this year?

a.) $26,000
b.) $19,500
c.) $47,000
d.) $57,000

User Bohemian
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1 Answer

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Final answer:

Delores, age 46, can contribute a maximum of $26,000 to her defined contribution plan this year, considering the standard limit of $19,500 plus an additional catch-up contribution of $6,500 for individuals aged 50 and over.

Step-by-step explanation:

Understanding Defined Contribution Plan Contributions

Regarding the maximum contribution to a defined contribution plan for Delores, who is 46 and earns $47,000, we need to refer to the Internal Revenue Service (IRS) contribution limits for the year in question. Generally, for the year 2021, the standard contribution limit for individuals under 50 is $19,500. However, individuals aged 50 and over are eligible for a catch-up contribution, which allows them to contribute an additional $6,500, making the total possible contribution $26,000. Therefore, the correct answer to the amount Delores can contribute to her defined contribution plan this year is $26,000 (option a).

User Christopher Smit
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