The contributions, subject to annual limits, traditionally are tax-deferred until retirement. The deferred compensation plan available to most state and municipal employees.
Deposits are tax deductible, and investments grow tax-deferred until retirement.
Money can be withdrawn penalty-free from the plan once an employee separates from service, regardless of age. Terms of IRAs vary depending on the investor's income level, the existence of other retirement accounts and the type of IRA selected. The Internet is packed with sites for calculating investment growth. Mutual fund companies and financial services companies offer information. The paper version of the kit is free.