Question

Bill has worked for White Drywall for 4 years. During this period, White Drywall has contributed $25,000 to his retirement plan. Assuming the company uses graded vesting, how much will Bill be able to roll into an IRA if he leaves White Drywall at the end of 4 years?

A) $0
B) $5,000
C) $10,000
D) $15,000
E) $20,000

Answer 1

Bill will be able to roll $10,000 into his IRA if he leaves White Drywall at the end of 4 years.

Step-by-step explanation:

White Drywall's retirement plan uses graded vesting, which means that the employee's ownership of the company's contributions increases gradually over time. In this case, since Bill has worked for 4 years, he will be entitled to 40% of the company's contributions to his retirement plan.

Therefore, Bill will be able to roll $10,000 ($25,000 * 40%) into his IRA if he leaves White Drywall at the end of 4 years.