7. Identify retirement deductions

Many employers offer retirement plans. These provide you income when you retire (in addition to what you will get from Social Security).

Retirement plans come in many varieties. Yours may be called a pension fund, a 401(k) plan, a SEP-IRA, or something else.

In many plans, the employer contributes some money and you put in the rest. Your contributions are deducted from your paycheck.

Sample retirement deduction:

• Suppose your employer has a “matching” retirement plan. You can put in 2.5% of your salary, and your employer matches the amount.
• If your gross weekly pay is $615.38, your deduction is 2.5% of $615.38.
  $615.38 × .025 = $15.38
• The total amount contributed by your employer and you is $15.38 × 2.
  $15.38 × 2 = $30.76