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Traditional “Pre-tax” 401(k) contributions: The money you invest in the Traditional 401(k) plan (from your monthly paychecks) is not taxed by the government at this time. You will pay taxes on this invested money (plus any interest you make on that $) when you withdraw the funds at retirement.

Example
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Traditional 401k Contribution Example

Year wages = $20,000
Yearly 401k Contribution = $2,000 
At the end of the year you will only be responsible to pay federal taxes on $18,000.

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