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Tax Advantages of a Retirement Plan

By saving through your employer’s retirement plan, you may end up with more money in your paycheck than you expect—and the potential for more in your account balance down the road.

Before-Tax Savings May Mean More Take-Home Pay.

Your automatic contributions are made before you pay taxes, so you may take home more than if you saved the same amount after-tax outside the plan. In this example, before-tax savings resulted in $225 more a year in spendable income.1

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Tax-Deferred Savings Could Help Your Money Grow Faster.

The earnings on the balance in your before-tax plan account grow tax-deferred until you start making withdrawals. Over time, this could dramatically boost your balance in retirement. This chart shows the growth of a hypothetical $1,500 yearly investment over 30 years in both a taxable savings account and a tax-deferred account.1, 2

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Your Plan Makes It Easy To Save.

Your employer's plan offers the convenience of automatic deductions and the ability to change your contribution amount and investment elections at any time. Participating in the plan is a great opportunity to help create a more secure future.

To join the plan or increase your contributions, contact your benefits administrator or call your Hartford representative.

 

 

1 Example is hypothetical and assumes a 15% tax bracket. Additional FICA and state taxes may apply.

2 Example is hypothetical and does not predict the performance of any investment option available in your employer's retirement plan. Before-tax savings are based on an annual before-tax contribution of $1,500 compounded weekly at a hypothetical 6% annual rate of return, tax-deferred. After-tax savings are based on a $1,500 annual investment, compounded weekly at a hypothetical 6% annual return. Actual returns and principal values will fluctuate.

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.

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.

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

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