This piece is designed to answer your questions about how the CalSTRS Program can work for you . . . In addition, you plan offers you lower costs, more information for decision-making more flexibility to personalize your investments, and the proven oversight of your CalSTRS Board. Why participation can help you meet your retirement savings goals. . These powerful tools for maximizing your savings are explained on the next few pages. Here's how it works . . .
Tax deferral is a powerful savings tool.
In fact, in many cases, you'll actually take home more money by making tax-deferred contributions than you would if you put the same amount of money into a regular savings account. Tax-deferred Contributions Taxes come due on your savings when you begin to make withdrawals. This will most likely occur when you have entered a lower tax bracket by retiring. By then, you will also have had the advantages of years of tax-deferred compounding. This automatic reinvestment of your earnings is called compounding.