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.
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.**