Case Study 1: Before-Tax or After-Tax Contributions

Mark retired after working 30 years for a construction company. Each week, he contributed to the Carpenter's Pension Plan. Every year, he paid tax on the gross amount of his salary, including his pension contribution. This means his pension contributions were made with dollars that had already been taxed. Now that Mark is receiving payments from the pension, he will not be taxed on the portion that represents his contributions.