There are a lot of good reasons to participate in an Employer Sponsored Pension Plan! Examples include: 401K, SIMPLEs and 403Bs.
- Many times your employer will make a matching contribution of up to a certain percent that you have contributed. That’s like getting a raise!!!!
- The typical match is your employer putting in 3% if you are contributing 3%.
- There is a possible credit available on your tax return depending on income levels. This is called the Retirement Savings Contribution Credit, aka The SAVERS CREDIT.
- This money is set aside pretax so it lowers your Adjusted Gross Income which helps you take advantage of other deductions, credits, etc.
- Any growth in the account is tax deferred.
- You will have money set aside for retirement…that’s good too!