Have you heard? It’s National Retirement Security Week (NRSW) and ADMIN Partners is celebrating this national event by spending the week promoting the benefits of saving for your future retirement. Each year, the NRSW is an opportunity for those working in financial services to bring awareness to others about the importance behind planning for a comfortable retirement. To do this, ADMIN will be sharing six different reasons that you should be utilizing your employer sponsored retirement plan.
In Part One we look at the benefits your contributions have on your taxable income, the opportunity to receive a match on the contributions you make and how your investments serve as a safety net for your future.
Your Contributions Reduce Your Taxable Income
Each year, your total taxable income is reduced by the amount that you contribute to your retirement plans. While your overall tax reduction will be based on a number of specifics (including the tax bracket you are in that year), it is clear that contributions to a retirement plan will benefit your overall taxable income each year. This also lends to the fact that the tax on your contributions, while still taxable at the time of withdrawal, are deferred until you retire.
Most employers (not all) will offer an employer match on the contributions made by participants within a Plan. Some employers will elect to match a percentage of the contributions made by participants, while others will offer a dollar match. This benefit is often the most appealing for employees as it represents even more money saved for your future. Even if you cannot personally afford to fund a large amount to your 403(b) Plan, contributing even just a small percentage will allow you to take advantage of this benefit.
* Be sure to check with your employer to confirm if they provide a match and how much.
Uncertainty Around Social Security and Pension
Now more than ever, there is a growing concern over of the state of the economy which has left employees uneasy in terms of their futures. With the uncertainty surrounding pensions and programs such as Social Security, people are hesitant about how they can create a safety net for retirement. This is where utilizing an employer-sponsored retirement plan is indispensable. These plans give you the opportunity to save your own income each and every pay period so that your money can grow along with you. See more on this topic here.
Stay Tuned: In Part 2 we will explore even more reasons to start investing in your employer’s retirement plan. From a higher return on investments to the various investment options available, there’s even more benefits to explore!