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“Save more for less.”

Sounds good, doesn’t it? Well, when you contribute to your employer-sponsored plan, the IRS offers you the same deal. Let me explain.

Your earnings are subject to income tax. (How well you know!) If you’re in the 25-percent income-tax bracket, your employer takes 25 cents from every dollar you earn and sends it to Uncle Sam, leaving you with 75 cents. But, when your contribute to your plan, money goes in before tax is figured. This means the full benefit of each dollar is working for you. Plus, you pay income tax on a smaller amount of income. Dee will show you.





“Same incomes, different outcomes.”

Jay and Ray each earn $50,000. Jay contributes 10 percent (or $5,000) to his plan each year. He is taxed on $45,000 of income (and pays $8,060). Ray misses the boat by contributing nothing. He pays $9,310 in taxes on a full $50,000 of income.

Assumes single taxpayer in 25% bracket with no other deductions.


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Advisory services provided through ING Financial Advisers, LLC (member SIPC).
This information is not intended to be tax or legal advice. ING does not offer tax or legal advice. Consult your own legal or tax advisor regarding your specific situation.
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