Almost anyone can save $100 a month ' a mere $25 a week ' for retirement.Tax breaks and a 401(k) match make it even easier to accumulate an extra $1,200 by the end of the year.Here's how topainlessly pad your retirement accountwith an extra $100 a month.Payroll deductionThe easiest way to save $100 per month for retirement is to have the amount withheld from your paycheck and deposited into a retirement, savings, or investment account.Depending on how often you are paid, you can elect to have $50 withheld from twice-monthly paychecks or have$25 directly deposited from weekly payments. If you don't have access to a retirement account at work, you can have the moneydirectly deposited to an individual retirement accountor investment account."The best way to save is to make an automatic deduction from your paycheck, and then the money does not arrive in your checking account to spend," says Marilyn Plum, a certified financial planner and director of portfolio management at Ballou Plum Wealth Advisors in Lafayette, California. "If you don't have a 401(k), anyone can set up their own individual retirement account or Roth IRA and still have the automatic deductions taken out of their checking account. That's a great way to save in an easy fashion, and you don't get tempted to spend that money."Employer matchSaving $100 per month is much easier if youget a 401(k) match. If your employer matches 50 cents for each dollar you save, you only need to tuck away about $67 to realize $100 per month in savings. If your employer matches your contributions dollarfordollar, you could get away with saving $50 per month and still end the year with an extra $1,200 in savings.Get an immediate tax deduction with a 401(k).If you elect to have $100 directly deposited from your paycheck to a 401(k) plan each month, your take-home paychecks will decline by less than $100because you are deferring paying income tax on the amount you save."If you have $100 taken out of your paycheck, tax-deferred, and you are in the 15% tax bracket, really, your paycheck will only go down by $85 instead of $100because of not having to withhold tax on the full amount," says Patricia Seaman, senior director of marketing and communicationsfor the National Endowment for Financial Education. "Use the tax system to help you get to that $100 without it feeling like that $100 is taken right out of your pay."You may get an additional tax break at the state level, meaning your paychecks will decline by even less than $85 if you make a $100 401(k) contribution. And if you are in a higher tax bracket, the tax deferral is even more valuable. Workers in the 25% tax bracket whocontribute $100 to a traditional 401(k)will only see their paychecks decline by $75.Get a tax-time deduction using an IRA.You could also contribute $100 per month to an IRA. Although you won't see an immediate tax reduction on your paychecks when you contribute to an IRA, you can exclude that amount from income tax when you file your tax return. If you are in the 25 % tax bracket and contribute $1,200 in an IRA, it will reduce your tax bill by $300. IRA contributions can be made up until your tax-filing deadline, so you canreduce your current tax billby contributing to a traditional IRA."When you use tax software, you can see how putting in $100 or $1,000 effects your tax bill," says J. Michael Collins, director of the Center for Financial Security at the University of Wisconsin'Madison. "If you get a refund, you can split your refund between your retirement account and your checking account if you want to do that."Claim the saver's credit.In addition to the tax deduction on your retirement account contributions, workers with adjusted gross incomes below $30,500 for singles, $45,750 for heads of household, and $61,000 for married couples in 2015 canclaim the saver's credit.This valuable tax credit is worth between 10% and 50% of the contribution amount, up to $2,000 for individuals and $4,000 for couples, with bigger credits going to people with lower incomes. "You get the deduction, and then in addition to that, you get the tax credit," Plum says. "It is a double benefit."SEE ALSO:Here's The Key To Choosing Between Two Retirement AccountsJoin the conversation about this story
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