Getting an early start

School teacher in front of her desk wants to get started with a 403(b) retirement plan.


While your retirement may feel – and be – decades away, getting a head start on planning for it early in your career can help you save more for the future, reduce your current taxes, and place you on a path towards financial security as you move forward in your career – and your life.

A 403(b) plan can be a smart investment for your future 

When it comes to saving for the future, the sooner you start, the better. By starting early in your career and contributing as much as possible to employer-sponsored retirement plans, such as a 403(b), you could potentially accumulate more money. By investing early in a tax-deferred account, your money works harder and longer for you, and you may end up with more money in your pocket.


Take the next step now

Enroll in an Equitable Financial 403(b) retirement plan today — and find an Equitable Advisors
Financial Professional who can help build your financial future with confidence.

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The more you contribute to your 403(b) plan now, the less you pay in taxes 

Did you know your 403(b) contributions are tax deferred? The contributions you make to your 403(b) plan go directly into your account prior to being taxed, reducing the income tax you owe for that year based on your marginal tax rate. 

Here’s an example that helps illustrate this:1

 Let's say your annual pretax income is $50,000

 If you contribute this much to your 403(b) pretax: $2,500 (5%) $5,000 (10%)  $7,5000 (15%) 
 Your taxable income will be: $47,500 $4,500 $42,500
 And you will pay the following income taxes: $5,315 $5,015 $4,715

Here are a few additional benefits to contributing to a 403(b) plan:

  1. Pay taxes later – The earnings and gains on amounts in your 403(b) account aren’t taxed until you withdraw them.
  2. You may qualify for an annual IRS tax credit – Depending on your individual circumstances, the Saver’s Credit may help reduce your overall annual income.
  3. More growth, less taxes – The more you contribute to your 403(b) plan, the more your savings can grow and reduce the amount of taxes you pay.

When it comes to planning, a little more now may mean a lot more later

By adding a 403(b) plan, even if you’re only investing a relatively small amount, you’re building towards larger goals over time thanks to the power of compounding. When it comes to saving for the future, the longer you’re invested, the more you can potentially benefit from compounding.

Compounding occurs when the earnings from your investments are reinvested so they can potentially produce even more earnings. It's like a snowball effect; each year's gains can build on those of the previous years to potentially increase the overall growth of your investment.

Here’s an example of how compounding can make a big difference as you’re saving for retirement. If you were to assume that your investments earn 8% annually, and you invested $2,000 a year (about $167/month) from age 25 to 35 ($20,000 total) and then stopped completely, you could accumulate $315,000 by age 65. But if you waited until age 35 and invested $2,000 a year for 30 years (for a total of $60,000), you could accumulate just $245,000 by age 65.2 

Early saver

  • 2,000/year
  • From age 25 to 35
  • Total contribution $20,000

Account balance at age of 65 is: $315,000

Late saver

  • $2,000/year
  • From age 35 to 65
  • Total contribution $60,000

Account balance at age of 65 is: $245,000


Thanks to the power of compound interest, every dollar you put in has the potential to grow. Start investing as early as you can to help put you on the path to a build financial independence.

Ready to take the next step? Here are a few tips on how to get started 

The key to getting started on saving for retirement is to think of it as another basic expense in your budget. Don't look for savings in what's left over after spending; often there isn't any. Instead, make saving a priority by thinking of it as another bill you need to pay – to your future self. By treating your savings deposits like rent payments and putting aside a set amount each month (or even each week), you can create a savings habit that will put you on the path towards financial security. Over time, even small amounts can make a big difference.

If your plan allows, make your 403(b) contributions automatic each month. Your contribution will automatically be deducted from your paycheck, taking the work out of it for you and making it easy to manage your personal budget.

While it’s never too late to start saving for retirement, getting an early start can give your investments more time to grow and with the benefits of compounding, you’ll be well on your way to creating the future you want – and a retirement you’ll love.

Based on 2019 federal tax tables, assuming married filing jointly ( Figures do not take into account any other sources of income, state or local income taxes, tax credits or deductions.

These hypothetical examples assume an 8% annual interest rate compounded monthly. Hypothetical results are for illustrative purposes only and are not indicative of the performance of any particular investment or financial product. Your results will vary.

Important Note: Equitable believes that education is a key step toward addressing your financial goals, and this discussion serves simply as an informational and educational resource. It does not constitute investment advice, nor does it make a direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your unique needs, goals and circumstances require the individualized attention of your financial professional. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Please be advised that this document is not intended as legal or tax advice.  Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.  The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstance from an independent tax advisor.

Equitable Financial Life Insurance Company (New York, NY) issues life insurance and annuity products. Securities offered through Equitable Advisors, LLC, member FINRA, SIPC (Equitable Financial Advisors in MI & TN).  Equitable Financial Life Insurance Company and Equitable Advisors are affiliated and do not provide tax or legal advice.
GE-5731522.1 (06/2023) (Exp. 06/2025)