April > Retirement Corner
Push your savings to the limit!
Its tax time again. If you’re looking for a way to lower your taxable income while saving for your retirement, significant tax savings are available to you right now through your UTSaver 403(b) Tax Sheltered Annuity (TSA) and UTSaver 457(b) Deferred Compensation Plan (DCP).
Participants under 50 can contribute as little as $15 a month or as much as $16,500 a year to either or both of the UTRetirement Programs. Participants over age 50 can contribute as much as $22,000 per year, or more in some circumstances. If that sounds like too much, stop and consider this:
Your Social Security withholding dropped from 6.2% to 4.2% for 2011, a difference of 2% applied to the first $106,800 of your wages. So if you are earning $50,000 per year, that could mean a tax reduction of up to $19 per week, or almost $1,000 for the year. If you invest that money in a UTSaver 403(b) or 457(b) plan now and continue to save at that level beyond 2011, your money could grow to over $57,000 in 20 years and over $148,000 in 30 (assuming an 8% average return).
To aid in your savings needs, the UTRetirement Program even has ways to save you money before you pay taxes on it (UTSaver 403(b) Traditional TSA, the UTSaver DCP) or after you pay taxes (UTSaver 403(b) Roth TSA) to give you the choice of deferring taxes to a later date, or paying now for savings in the future.
Regardless of which account or which savings status you choose, now is the perfect time to invest in your future. Make sure to take full advantage of your tax savings opportunities!
Please see our website at www.utretirement.utsystem.edu to learn more.