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Deferred Account

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Deferred account
A type of account that delays taxes on that account until some later date. An example is an IRA account.

Deferred Account
An annuity or other investment vehicle in which one does not pay taxes on the contributions until after withdrawal. Common examples of deferred accounts are a 401(k) and a traditional IRA. Generally speaking, one places a portion of his/her pre-tax income into a deferred account and allows it to be invested. Taxation is deferred until withdrawal from the account, generally after retirement.


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Given that the tax deferred account is taxed upon distribution, we can effectively say that it grows at a slower rate than the tax free account.
In short, whatever gains are not from a tax deferred account, such as an IRA or 401k, is fair game for the Internal Revenue Service.
Rollover IRA As with an employer-sponsored retirement savings plan, a rollover IRA allows individuals to keep retirement assets invested in a tax deferred account, but with two additional advantages.
 
 
 
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