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<pre class="ql-syntax">Jane Doe <span class="hljs-keyword">is</span>

considering job offers <span class="hljs-keyword">from</span> ABC <span class="hljs-keyword">and</span> XYZ companies. Jane <span class="hljs-keyword">is</span> <span class="hljs-number">45</span> years old. ABC sponsors a profit sharing plan <span class="hljs-keyword">and</span> XYZ sponsors a <span class="hljs-number">401</span>(k).Jane wants to figure out which company has the better plan for her.  ABC and XYZ have each offered Jane a salary of $50,000 per year to start. </pre>

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2. Jane Doe is considering job offers from ABC and XYZ companies. Jane is 45 years old. ABC sponsors a profit sharing plan and XYZ sponsors a 401(k) plan.
Jane wants to figure out which company has the better plan for her. ABC and XYZ have each offered Jane a salary of $50,000 per year to start.
ABC Company - Employees are eligible after one year of service. The company contributes 3% of pay to each participant's account plus an additional amount
based on company performance. The average additional amount each year for the past 15 years has been 4% of pay.
XYZ Company - Employees are eligible to participate immediately. Employees can contribute up to 15% of pay to the plan. XYZ will match all contributions up to 5% of pay.
a.
Using the tables below, project Jane's account balance to age 65 under both company plans assuming ABC maintains the 4% profit sharing contribution.
You will need to make assumptions about Jane's future salary, deferral percentage and investment income.
b.
Which plan is better for Jane? Provide your rationale.
Company ABC
Company XYZ
Annual Salary
Employee
Employer
Investment
Account
Employee
Employer
Investment
Account
Increase
Deferral Employer Match
Contribution
Profit Sharing
Income
Balance EOY
Deferral Employer Match
Contribution
Profit Sharing
Income
Balance EOY
0%
0%
0%
0%
4%
0%
0%
5%
0%
5%
0%
Age
Salary
50,000
46
47
48
49
50
51
52
53
65

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