Believe it or not, millions of workers do—to the tune of $24 billion dollars per year per CNBC. Read on to make sure you’re not one of them.
Annual Employer Match
As part of your benefit package, many employers offer something called an “employer match”.
That means that for the first specific percentage you contribute to your retirement plan, they’ll match it up to a certain percentage.
Let’s say your plan has a 3% match. So when you contribute 3% of your paycheck to your retirement plan, your employer will contribute another 3%. The extra 3% is, really, free money to you. And it’s not just once. . .you get it EVERY year.
Don’t miss out! Just increase your retirement plan contribution to ensure you get the max every year.
Saver’s Credit
The Saver’s Credit is not well-known, but if you qualify, it can put some money in your pocket! Unfortunately, most people don’t know it exists, and you have to claim it to get credit, so an estimated 75% of the people eligible miss out on this potential bonus.
The Saver’s Credit is available to those with an adjusted gross income up to $30,750 (or $41,000 if you file jointly with your spouse). It provides a credit up to $1,000 (or $2,000 for joint filers) for contributions to an IRA or to your company retirement plan.
This is a tax credit. This is far more valuable than a deduction, which just reduces your taxable income. A credit directly reduces your tax liability. So if you owe $2,000 for taxes and get a $1,000 savers credit, you just saved $1,000!
There’s a few caveats so be sure to read the eligibility requirements before pursuing this credit. For example it is not available to students.
To determine your credit and learn more, see the page on the Saver’s Credit on the IRS website.
Looking for other painless ways to get your money working harder for you? Check out our other resources to get started.
