Pre-tax contributions are money you put into a retirement account before any income taxes are taken out of your paycheck. This lowers your taxable income for the year, which could mean you pay less in taxes now. The idea is that you’ll pay taxes later, when you withdraw the money in retirement, and you might be in a lower tax bracket by then. Pre-tax contributions are common in plans like traditional 401ks and traditional IRAs. These accounts let your money grow over time without being taxed along the way, which can help boost your long-term savings. However, since taxes are only delayed, you’ll owe income taxes on both your contributions and earnings when you take the money out in retirement. This approach works well for people who want a tax break now and expect to have a lower income later in life.