There are two tax-advantaged ways you can contribute to the savings plan. You can make before-tax payroll deductions or after-tax “Roth” contributions. This chart can help you decide whether your contributions should be before-tax, Roth or a combination of both.
|BEFORE-TAX CONTRIBUTIONS||ROTH CONTRIBUTIONS|
|Funding||Funded with before tax dollars.||Funded with after-tax dollars.|
|Tax Benefits||You defer paying taxes; your balance grows tax free.||You pay taxes up front, but your contributions grow tax free.|
|Tax Treatment When You Withdraw The Money In Retirement||You pay taxes on before-tax contributions and earnings.||You pay no taxes on contributions or earnings if you’re at least 59½ (or you die, or you become disabled and you’ve held the Roth contributions for at least five years).|