Introduction to Tax-Deferred Retirement Plans
Besides helping you build income for your retirement, many retirement plans offer the added benefit of sheltering your money from taxes. Nearly all plans build tax-deferred value, and some allow you to shelter your current income as well.
Retirement plans can be as simple as individual retirement accounts (IRAs) or as complex as corporate pension plans. Retirement plans that allow you to contribute toward your retirement savings have become more popular over the last several years. You may already be familiar with some of them. They have names like 401(k), 403(b), IRA, SIMPLE IRA, SEP IRA, Keogh, and annuity.
Regardless of the name, they all allow you and your employer the opportunity to save money for retirement while saving taxes on the growth within the plans. Some even have immediate tax benefits in the form of a current year deduction from income for income tax calculations.