Are pension plan contribution tax deductible?

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Are my 401k contributions tax deductible and what exactly is the deductible part that I can use? Are the pension plan contributions fully tax deductible?

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score 0 · Answer 1 · 2013-05-06T22:46:03+00:00

Yes, the contributions you make towards your pension fund are fully tax deductible. On top of that, the amount that your employer contributes towards your pension is also tax deductible.

For this reason, it’s always a good idea to fully utilise the “match” concept that many employers offer. For example, if your employer says that they will match your contribution up to 4%, it’s a good idea to contribute at least 4% so that you can utilise the “free money” that your employer gives plus benefit from the tax incentive.