A few years ago, when the economy was great, most of the people who didn’t save for retirement usually didn’t think about it. It’s difficult to think of the far future on a regular day, it’s even tougher to think about it when it’s sunny, beautiful, and there isn’t a cloud in the sky. It’s toughest when the economy is rough, we’re all playing defense, and it doesn’t seem like we’ll even make it to tomorrow, let alone the next twenty or thirty years. It is, however, always important to think about saving for retirement and fortunately it’s not as expensive as you may think. You can afford to save for retirement, it will cost you very little, and I will explain why.
When you make contributions to an employer 401(k), you get an immediate tax deduction if it’s withdrawn from your paycheck. We’ll look at more examples below but if you contribute $100 a pay period and are in the 28% tax bracket, only $72 is deducted from your paycheck (you contribute $100 but get the deduction, so you pay $28 less in taxes). If your company offers a 401(k) and a company match, saving for retirement is even cheaper.
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