Got some good financial info for you all, no matter what you make read this!
I found out recently about something the government is doing. They have come up with a plan that will be going on for a minimum of 4 years, but may be extended longer. The deal is that they will give you tax credit based on how much money you put into a 403b retirement fund. The money back is good and 403s are safe money. For those that don't know (I am a little lost too on some of this stuff) I will try to explain.
If you put money into one of these retirement accounts the US government will then give you a break on your taxes for the next year based on how much you make AFTER the money you put into the account. The real kicker is that at really low wage amounts its %50 of what you put in up to $2000. So let me give you an example:
I currently make $19,000 (yes thats with a BA and working in feild grrr)
At $15,000 they will give me a %50 tax credit for next year.
I put enough into the 403 to get me to that number, ie $4000, then on my taxes next year I will owe $1000 less. Meaning if they have taken $3000 out of my paycheck all year and my tax owed is $3000, I will then be getting $1000 cash back. Also, you are figured on tax owed based on how much you made AFTER money was taken out for the 403, not how much you made total. In my case from $19,000 to $15,000 is about $500 less (if you have to pay taxes at all for such a low amount. In my case what I will get will effectivly be $4000 in a retirment fund for about a total of $2500. I just made $1500 and that does not include the intest on the backside (when I retire the money I have made off this account). I swear this is not smoke and mirrors.
The range is like %20 for $15,000 to $17,000 and %10 in there too. These numbers apply to single non head of household. They change for married, head of household and one other thing.
Just to run the numbers through again:
say you are making $16,500 a year. You have them take enough out of your paychecks to get you below the $15,000 mark ($1500), you will have $1500 in a retirment account, and will owe $750 less next year on taxes plus the reduction in tax you owe based on your new income level. If you were going to get a $250 rebate check, that just changed to $1000.
Definately check this out with your bosses/financial advisors/parents/wives or anyone else you need to.
If you are making big money....nevermind, its not going to help you much. Its aimed at people making less than $25,000.
Another thing is that you can do this EVERY YEAR for the next 4 years, but there is a good chance it may not be renewed after that. Check into it now, while you can.