Insights & Ideas

401(k) and 403(b) Plans

401(k)s and 403(b)(7)s are employer-sponsored plans that allow employees to set aside savings for retirement. Contributions are deducted from your salary automatically, before you receive your paycheck — and before taxes are calculated*. Because you report less current income, you pay less current taxes on your pre-distribution income. All of your contributions go straight into your plan. Federal taxes are deferred until you begin receiving income later on. In most cases, state and local taxes are deferred as well.1 Thanks to the power of tax-deferred compounding, these plans let you enjoy considerable tax savings throughout your working years and create a nest egg to draw on once you retire. Even modest contributions can grow to a sizable amount when you invest regularly on a tax-deferred basis.

Tax Deferral

Many employers also offer matching contributions to their employees' 401(k) or 403(b)(7) plans. These are contributions made on your behalf by your employer, and they also receive tax-deferred treatment.

Dreyfus funds are investment options in many 401(k)s across the country — check with your employer to see if Dreyfus funds are offered through your plan.

For employees of educational or non-profit organizations, the Dreyfus 403(b)(7) Plan combines the benefits of tax deferral with the investment diversity and flexibility you deserve. This plan enables you to conveniently build assets for retirement through automatic salary reduction — while enjoying significant tax benefits today.

Call us at 1-800-358-0910 to speak with a Retirement Specialist or learn more about 403(b)(7) plans.

Investors should consider the investment objectives, risks, charges, and expenses of a fund carefully before investing. Download a prospectus that contains this and other information about a fund, and read it carefully before investing.

*For non-Roth account type contributions.

This information is general in nature and not intended to constitute advice. Please consult your tax advisor for more detailed information on tax issues and advice on your specific situation.

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