Everybody loves a bargain.  My daughters Kelsey and Savannah are great bargain shoppers.  Their favorite thing to do after returning from shopping is to have everyone guess how much they paid for the various items.  It brings them a lot of joy to get great deals.  Unfortunately, many of us are missing out on the best bargain ever; the chance to buy dollars at a discount. 

Dollars for Sale! Prices Reduced to as Low as 38 Cents

If your favorite place to shop ran the advertisement above, would it get your attention?  My guess is if a store ran this ad the lines would be longer than on Black Friday.  Who could resist buying dollars for 38 cents?  Yet many people are offered a similar deal and reject it.  Are you passing up the bargain of the century?  How can you buy dollars for 38 cents?  Allow me to explain. 

Many companies match employee contributions to company sponsored retirement plans up to a certain percentage of the employee’s wages.  If your company matches your retirement contributions dollar for dollar, then a 50 cent contribution by you magically turns into a dollar.  This is equivalent to you purchasing a dollar for 50 cents.

Half off sales are great, especially on money, but it gets even better.  The government, in an effort to nudge people to save more for retirement, has made the deal even sweeter by offering a tax break on the money you save for retirement.  If you contribute to a traditional retirement plan the money you contribute is not taxable until it is withdrawn from your account.  If your marginal tax rate is 25 percent, then you will save 12 cents in taxes on your 50 cent contribution. This reduces your price for the $1 of savings to 38 cents.  Now that’s a bargain!

If your company is not quite so generous, and only matches half of what you contribute (they contribute $1 for every $2 you save) then, after taxes, you are still buying retirement saving dollars for about 50 cents.  Not as good as the first deal, but still a great bargain. 

Take Action Now

Buying dollars for 38 cents would make you very rich if you could do it often enough.  For this reason “quantities are limited” and you can only do it on a small percentage of the dollars you earn.  Also, to get this deal you have to agree to lock your money up until retirement age, or close to it.  Withdrawing it early will result in a 10 percent penalty in most cases, plus the payment of the taxes you saved when you contributed it. 

In spite of these restrictions this is far too good a deal to pass up.  So demonstrate your shopping savvy.  If you are given the opportunity to buy dollars at a discount, stock up and buy all of them you can.  It is one of the best financial decisions you can make.