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Retirement Plan Basics

Your employer's retirement plan is a great way to save because it offers:

Control

  • You decide how much to contribute within plan limitations.
  • You choose how to invest your contributions.

Convenience

  • Your contributions are deducted automatically from your paycheck.
  • Automatic deductions allow you to take advantage of systematic investing.*
  • There are a variety of investment choices to fit your needs.

Tax Benefits

  • Your pre-tax contributions may reduce your current taxable income, lowering your current annual income taxes.
  • Your participant account assets can accumulate without being taxed until you begin withdrawals.**

Portability

  • You can take your vested participant account balance with you if you change employers.

Flexibility

  • You can monitor your participant account any time by phone or website.
  • You can adjust your contributions and investment choice decisions.

Compounding

  • When you save in a retirement plan, you have the potential to earn a return not only on the amount you contribute, but also on any earnings your contributions generate (and on any earnings those earnings generate). So your participant account assets may accumulate faster.

 

 

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

Many tax planning strategies emphasize the deferral of current income taxes, on the basis that your federal income tax rate may be lower at retirement. Please keep in mind that federal income tax rates are unpredictable and may be higher when you take a distribution than at the time of deferral. Other factors, including state tax rates and your income, may also affect your overall tax rate upon distribution. Please consult with your tax advisor for individual tax planning strategy and advice. The Hartford does not predict or in any way guarantee favorable tax results.

* Dollar-cost averaging involves continuous investing, regardless of fluctuating price levels. Investors should consider their ability to continue purchasing units/shares during periods of fluctuating prices. Dollar-cost averaging does not ensure a profit or protect against loss in a declining market environment, but it can be a sound investment strategy.

** Withdrawals are subject to ordinary income tax, and if taken prior to age 59½, a 10% federal tax penalty may apply. The investment return and principal value of an investment will fluctuate so that an investor's shares/units, when redeemed, may be worth more or less than their original cost.

NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY - MAY LOSE VALUE - NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

RPS 105735 05/11