Determining the qualified pension plan

Reference no: EM13972833

Zoie has worked for Humple Manufacturing for 16 years. Humple has a pension plan that matches employee contributions by up to 4% of an employee's salary. Zoie, age 60, is ready to retire. She has contributed $20,000 to the plan. Under Humple's pension plan, Zoie will receive $1,000 per month until she dies. Assume that Zoie is expected to live 25 more years. She wants to know the tax consequences of each pen- sion payment that she will receive.

a. Assume Humple's plan is a qualified pension plan.

b. Assume Humple's plan is not a qualified plan. Zoie has paid tax on all contributions into and earned by the plan.

Reference no: EM13972833

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