Employer-sponsored qualified retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. If your employer offers such a plan and you're not participating in it, you should be. Once you're participating in a plan, try to take full advantage of it.


Understand your employer-sponsored plan


Before you can take advantage of your employer's plan, you need to understand how these plans work. Read everything you can about the plan and talk to your em- ployer's benefits officer. You can also talk to a financial planner, a tax advisor, and other professionals. Recognize the key features that many employer-sponsored plans share:


Your employer automatically deducts your contributions from your paycheck. You may never even miss the money--out of sight, out of mind.


You decide what portion of your salary to contribute, up to the legal limit. And you can usually change your contribution amount on certain dates during the year.


With 401(k), 403(b), 457(b), SARSEPs, and SIMPLE plans, you contribute to the plan on a pretax basis. Your contributions come off the top of your salary before your employer withholds income taxes.


16 Kalon Women Magazine


Your 401(k), 403(b), or 457(b) plan may let you make after-tax Roth contribu- May 2012


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