Next element of the Savings component: Tax-deferred vehicles

The final elements of the savings component in our Protection, Savings, & Growth model are tax-deductible retirement savings accounts. This would include any qualified retirement where you deduct contributions from your taxable income in the current tax year. This could include various types of IRAs, 401(k)s, 403(b)s, profit sharing plans, money purchase plans, etc. The funds in the accounts are usually invested and the growth of the account is tax deferred. Taxes are paid later at retirement age generally at ordinary income taxes. There are no writing off losses along the way or long term capital gain/dividend tax treatment. The accounts are generally not very liquid/accessible. Withdrawals prior to age 59 ? usually will include a 10% penalty plus taxes. Qualified plans are very popular for their accumulation benefits, however, an exit/distribution is also an important consideration. Please reach out if you would like to discuss how you can properly position your retirement account with your overall financial strategy.

 Take care,

 Bob