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Traditional 401(k) Contribution Example Yearly wages = $20,000 |
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Traditional 401(k) contributuions save you money on your taxes now. The amount you contribute from your paychecks as Tradiditional 401(k) contributions reduce your federal tax bracket and liability right now. Traditional 401(k) contributions may be a good fit for people who 1) want to take Parsomage withjdrawals at retirement - see Withdrawal as Parsonage (Age 59 1/2 or Older ) or 2) people who are making a higher wage now (in their working years) and are therefore in a higher tax bracket now than they foresee themselves being when they retire. |
Roth “After-Tax” Contributions
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