Invest Through Tax-Deferred Retirement Accounts
When you invest in a tax-deferred retirement account, you defer the taxes you would otherwise have to pay on the income you earn in that account until you take it out. On the one hand, that means you don’t have to worry about taxes as you earn returns and let your nest egg grow. On the other hand, you expect to pay taxes all at once at the end of the holding period, which could be bad for an unprepared person.
To decide whether the tax shelter is right for you, you’ll need to think about several things:
- · How much money you need to amass to reach your goals …”
- · How much money you expect to earn on your investments each year …”
- · How many years until you retire …”
- · Whether it’s better to invest in things outside of retirement accounts that have a lower tax burden but potentially higher returns
- · How much you can pay in taxes now …”
A Note About Roth IRAs
Consider an Annuity
Annuities are the investment of choice for many retirees because of their guaranteed income – that is, income that you can depend on. As you approach