Question

March earned $125,000 this year her company offered a money purchase pension plan where the company and the employees split the contributions evenly the maximum annual contribution to a money purchase plan last year was $27,230 and this year it was $27,830 how much could contribute in this year

Answer 1

In a money purchase pension plan, both the company and the employee make contributions. Since the contributions are split evenly, you can find the individual contribution by dividing the maximum annual contribution by 2.

This year's maximum annual contribution is $27,830, so the individual contribution would be:

\[ \text{Individual Contribution} = \frac{\text{Maximum Annual Contribution}}{2} \]

\[ \text{Individual Contribution} = \frac{27,830}{2} \]

Now, calculate the individual contribution:

\[ \text{Individual Contribution} = 13,915 \]

Therefore, March could contribute $13,915 to the money purchase pension plan this year.