Issue 2, 2025

Not in Your Employer’s Deferred Comp Plan? Four reasons to sign up today. In 2022, we surveyed nearly a thousand government employees. We found four reasons why eligible employees do not participate in their employer’s deferred compensation plan. 1. I don’t think I need to participate. Even if you’re earning a pension, your retirement income may not be enough to cover all your expenses. A deferred compensation plan helps fill the gap so you can retire with more confidence. 2. I haven’t taken the time to sign up. You’re busy—but signing up is surprisingly quick. And there’s free help if you need it. The longer you wait, the less time your money has to grow. Even small contributions now can make a big difference later. 3. I can’t afford to participate. You don’t need to save a lot to get started. Even $25 per paycheck can lower your taxes and build savings over time. You can increase or decrease your contributions as needed. In addition, My Penny Earned’s financial empowerment courses could help you find some money for retirement savings. 4. I don’t understand the plan. A tax-advantaged deferred compensation plan is simply a way to save money for retirement — tax-free until you withdraw it. You can choose how much to contribute and adjust it as you go. When you have questions, free help is available. Sign Up Today Your future self will thank you for taking the first step now.

Investment concerns? Get started by learning your risk tolerance.

Reader Question: What can I do if I’m not eligible to participate in a deferred comp plan? If your job doesn’t offer a retirement plan, you’re not alone. More than one in four private industry workers and 8% of state and local government employees don’t have access to one. For part-time workers, the numbers are even lower — just 26% of private industry part-timers and 47% of part-time government workers have a retirement plan. What can you do if your job doesn’t offer a plan? The good news is you can create your own retirement savings plan — and it’s easier than you think! Create Your Own Retirement Savings Plan Even if your employer doesn’t offer a plan, you don’t have to miss out on the benefits of saving for retirement. By setting up a Traditional or Roth IRA, you can still take advantage of tax benefits and long-term growth. Here’s how they compare: ◼ Traditional IRA: Contribute pre-tax money and pay taxes later when you withdraw. ◼ Roth IRA: Pay taxes now and enjoy tax-free withdrawals in retirement. Which one is right for you? It depends on your income, tax situation, and future plans. Learn more Want a step-by-step guide to setting up your IRA? Take My Penny Earned’s lesson, Creating Your Own Retirement Savings Plan (login required).

Hate doing your taxes? Learn about free and paid help. Tax time is coming. But with a little help – some of it free – filing your taxes doesn’t have to be a major headache. Free help With an April 15 deadline not far off, the Consumer Financial Protection Bureau (CFPB) offers a free and simple online guide to filing your taxes. You may be surprised that free tax preparation help is available through the IRS Volunteer Income Tax Assistance (VITA), AARP Foundation Tax-Aide, and the Tax Counseling for the Elderly (TCE) programs. Using a paid tax preparer You may turn to a paid tax preparer if you don’t qualify for free help. What do you need to know when selecting one? Here are a few things to consider: The fees you pay will generally be based on the complexity of your return. Suppose you have multiple income sources including self-employment, are claiming certain tax credits, or have had changes in your life circumstances during the year. In that case, you will likely pay more than if you have a simple return. Despite the complexity of your return, you may still be eligible to file your taxes for free if you meet the guidelines listed on the CFPB website. So, check with the free provider of your choice first before paying to have your taxes done. More tips about selecting a paid preparer: ◼ Check the preparer’s qualifications. You can use the IRS directory of federal tax return preparers to check a preparer’s credentials. ◼ Check the preparer’s history. Taxpayers can ask the local Better Business Bureau about the preparer. ◼ Ask about service fees. And be wary of preparers who boast about getting bigger refunds than their competition. ◼ Make sure the preparer is available after this year’s April 15 due date in case you need follow-up help with your taxes. ◼ Your tax documents, such as W-2s, are your records. Preparers cannot keep the originals of these documents or keep your ID to force you to use their service. If you file using their service, they will need copies of your documents for their records. ◼ Ensure that the preparer signs the return and includes their Preparer Tax Identification Number (PTIN). All paid tax preparers must have a PTIN. By law, paid preparers must sign returns and include their PTIN on the return they file. If you go to a paid preparer, they may offer you additional products that will reduce your refund amount, such as refund anticipation checks or refund advance loans. Source: Consumer Financial Protection Bureau