Mich. Contrary to what seems like common sense, sometimes your net profits are higher if you let the taxman take his piece of the pie up front. This is not to say tax deferral isn't frequently a terrific deal.
Retirement savings is one of the most frequent goals of a tax-deferred account.
In many employer-sponsored plans, your employer makes a matching contribution, and even without an employer match, you are probably better off if the money is automatically siphoned from your paycheck. That said, you should think carefully about how to allocate investments between your tax-deferred and taxable accounts. This is true not just for retirement accounts but other tax-deferred accounts such as variable life insurance plans. Your time horizon before you plan to withdraw the money is a major factor in your decision. If you expect to hold an investment for just a few years, and it's an individual stock or a tax-efficient mutual fund, you should probably make that investment through a taxable account.