The Beauty of Pre-tax Savings

See how pre-tax savings affects your take-home pay.

Pre-tax savings simply means that your contribution to your retirement savings plan is made before taxes are deducted. When your contribution is deducted before federal and state income taxes are taken out, the impact to your take home pay may be less than you’d expect.

 

The Beauty of Pre-tax Savings
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California income tax brackets
Other state income tax brackets
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No contribution

With contribution

Contributing $200 per pay period, your paycheck is reduced by $150.

Net Pay after contribution (post-tax) is $750.**

With no contribution your (post-tax) paycheck is $900.**

* If you know your rate of return, select that number. If not, you can estimate your return or contact your provider to obtain your current rate. To estimate returns: conservative investors/fixed annuity investors should estimate 2%-3%, moderate investors 4% and aggressive investors 6%. This is based on long-term results net of fees (choose the lower number within your category if you are within 5 years of retirement). Past performance is not a guarantee of future results, and your return is not guaranteed.

** Based on the federal income tax bracket and state income tax bracket that corresponds to the supplied information. Please note that this should be used for illustrative purposes and should not be considered tax advice.

This calculator is designed to estimate the impact of a plan loan on your future 403(b) or 457 plan account balance. Calculations are based on the assumptions provided and are not guaranteed. Please note the calculator assumes a constant return pattern. Actual results are likely to vary due to return volatility.