Take advantage of it. A great savings vehicle to consider is one that offers tax-deferred savings. In a taxable account, you pay federal tax on the interest your money earns before retirement. In a tax-deferred account, the government doesn't collect taxes until you retire, which means that more of your money can accumulate at a compound rate. Ask your financial advisor for the latest information on the IRAs that may be available to you.
IRAs have different features and benefits, as well as restrictions on who can contribute.
The tax-deferred compounding feature is one smart reason to establish an IRA and to add to the account consistently every year. An annuity is a contract between an individual and an insurance company and can be used for accumulating assets for retirement or as a method of providing an income stream at some future date. The contract owner makes lump sum or periodic contributions to an annuity. Federal income tax law limits how much you and your employer can contribute to your Retirement Annuity or Group Retirement Annuity each year. Each type of annuity has its particular benefits and risks.