Tax-Deferred Account

Tax-Deferred Account

1. See: 401(k).

2. See: Traditional IRA.
References in periodicals archive ?
Treasuries certainly can be held in a tax-deferred account such as a 401(k) or an IRA, and many investors do so.
Seven in 10 retirement-age participants-defined as those ages 60 and older terminating from a defined contribution plan-have preserved their savings in a tax-deferred account after five calendar years, according to research from Vanguard.
If an investor is going to venture into less liquid investments in hopes of higher returns, it probably makes sense to do so in an IRA or other tax-deferred account given that these will likely be the last assets they tap into.
If I believe I will be in the 15 percent marginal tax bracket in retirement and I have $18,000 to save in 2015,1 may want to save my first $12,550 in a tax-deferred account like a 401(k) that avoids current income tax and the remaining $5,450 in tax-free account (Roth) that I pay tax on now, but will grow tax free.
There is often confusion about the benefits and mathematics of tax deferral, as well as pretax savings, because sometimes a tax-deferred account or investment only defers one from paying potentially more down the road.
HSA savings are deposited into a tax-deferred account and can be withdrawn tax-free when used for qualified medical expenses, which include health insurance deductibles as well as dental, vision and other types of care often not covered by health insurance.
This rule differs from the traditional IRA rollover process, which allows the taxpayer to avoid taxation when he or she deposits the IRA funds into another tax-deferred account within sixty days of the initial withdrawal.
In the table below, we show pre-tax equivalent returns of earning 8% in a tax-deferred account.
But with an HSA, as long as the funds are used for qualified medical expenses, account holders never pay taxes on the money--it's not a tax-deferred account like an IRA or a 401(k), it's actually a tax-free account.
For example, it's generally not a good idea to hold tax-free investments, such as municipal bonds, in a tax-deferred account (e.
Someone withdrawing $100,000 a year from a tax-deferred account would fall into the 25 percent federal tax bracket.
Likewise, in contrast to the traditional IRA, the Roth IRA permits an individual to make nondeductible contributions to a tax-deferred account up to the same dollar limits.