Contribute to an employer-sponsored retirement plan. Many employers also offer a matching feature on funds you contribute - giving you additional incentive to maximize your contributions. Withdrawals from tax-deferred accounts prior to age 59 V2 may be subject to a 10 percent IRS penalty. When money is invested in traditional IRAs, any earnings grow tax-deferred. Contribute to an annuity.
Annuities offer another alternative for accumulating retirement savings.
Although annuities are life insurance company products, they work quite differently than life insurance policies. Annuities offer a regular stream of retirement income with no limit on your investment amount. You can invest in a lump sum or at regular intervals, and any growth of the annuities is not taxed until distributed. Avoid taxes altogether. Income earned on securities such as municipal bonds or municipal bond funds is exempt from federal income taxes.