Up to $1,000 free money may be yours

The federal government wants you to invest for retirement so it’s giving you an incentive – The Saver’s Tax Credit. The income tax credit helps low and moderate income taxpayers save for retirement by reducing their federal tax bills by up to $1,000. If you qualify, the Saver’s Tax Credit gives you a credit on your federal income tax return – just for investing for retirement through your 457 and/or 401(a) plan.

The Saver’s Tax Credit is real money in your pocket, because it is subtracted from what you owe in taxes. Even if it’s more than what you owe, you keep the difference. So if you owe $400 in federal taxes, but you are eligible for a tax credit of $1,000, the federal government will give you $600!

Your eligibility depends on your filing status and your modified adjusted gross income.

This chart helps you find out if you qualify for the Saver's Tax Credit in 2011.

Filing Status/Adjusted Gross Income for 2011

Amount of Credit


Head of Household


50% of up to the first $2,000 deferred in your retirement account(s)

$0 to $34,000

$0 to $25,500

$0 to $17,000

20% of first $2,000 deferred

$34,001 to $36,500

$25,501 to $27,375

$17,001 to $18,250

10% of first $2,000 deferred

$36,501 to $56,500

$27,376 to $42,375

$18,251 to $28,250


So, for example, if you are single, make about $15,000 a year and invest $2,000 in your 457 and/or 401(a) plan, you may be eligible for a tax credit of $1,000. Or, if you defer only $1,000 for retirement, you would still get a $500 tax credit.

Now that’s free money! Want to learn more about this or other ways to make your retirement dreams come true?  Talk to your Nationwide Retirement Solutions Retirement Specialist at (858) 569-0295 to make an appointment or 1-888-DC4-LIFE (324-5433) from 5 a.m. to 8 p.m. Pacific Standard Time to speak with a specialist over the phone.