Saving enough for retirement can be a challenge! But, knowing you have a plan in place for the future should change the choices you make today and give you peace for tomorrow! Here are 3 ways to save for retirement and get the added benefit of saving taxes, too:

1. Take advantage of the reduced 2011 Social Security withholdings to increase your retirement plan contributions and keep the same take-home pay! The 2% decrease in withholdings means you can increase your contributions by significantly more than 2% without decreasing your net pay! For example, someone earning $36,000 a year (married with 4 exemptions) and currently contributing $60 a paycheck can increase their contribution to $135 and keep the same take-home amount. That’s a 125% increase!
2. Understand Roth vs. Traditional contributions and how they can best work for you.
   1. Roth contributions are after-tax contributions, meaning you don't get any reduction in taxes for making the contribution. However, when you go to withdraw the funds in retirement, you won’t pay any taxes on the funds – what you initially contributed or the earnings.
      
      Roth makes sense for people in a low tax bracket, pastors and overseas missionaries.
   2. Traditional contributions are pre-tax contributions that do reduce your taxes today. However, the contributions grow tax-deferred, meaning that when you withdraw the funds, you will pay taxes on the amount you receive, both the initial amount and the earnings.
      
      Traditional makes sense for people in a high tax bracket.
3. Effectively use your employer-sponsored retirement plan. Your employer-sponsored retirement plan is one of the most effective tools to help you save for “the day the paycheck stops, but the call to service remains.” Here are some smart ways to use your plan:
   1. If your plan includes an employer match, make sure you are contributing to receive the full match. Don’t leave any free money on the table!
   2. When you receive a raise, put 50% into your retirement savings. Choose to pay yourself first! If you are concerned about being underfunded in retirement, you may want to increase the percentage.