How Can I Save with Savings Plus?
Savings Plus offers you two ways to save for retirement. You can choose to make before-tax contributions, which allow you to delay paying taxes on your contribution (or account earnings) until you withdraw the funds, generally during retirement.
The other way to save is by making Roth contributions. Since Roth contributions come out of your pay after taxes are deducted, these contributions generally won't reduce your current tax liability. However, your Roth contributions and related earnings are withdrawn tax-free at retirement (as long as the Roth contributions have been in the plan for at least five years)—a potentially significant tax break if you're in a higher income tax bracket when you retire than when you make the contributions.
Even if you expect to get a pension or Social Security benefits, it may not be enough for your retirement. The additional income you receive from your Savings Plus account can be one of the keys to your future financial security.
Whether your retirement is a long way off or coming up fast, the sooner you start a Savings Plus account, the better.
If you contribute to both before-tax and Roth you'll have the ability to make separate investment choices: one for your before-tax money and separate one for your Roth money. This new feature allows you to invest before-tax and Roth monies with different time horizons in mind. However, if you use the Online Advice tool or Managed Accounts through Aon Hewitt Financial Advisors, you won't have the ability to manage your before-tax and Roth dollars separately.