IRA Beneficiary
3. What Are Tax-Deferred Plans?
Let's start with some basics. First, what are the tax-deferred plans that we will be talking about?
They include traditional IRAs, pension, profit sharing, 401(k), 403(b) and Keogh plans.
These are all called tax-deferred plans because you did not pay income taxes on this money when the contributions were made and you do not pay income taxes on the earnings each year. The income taxes are deferred until you withdraw the money at a later time - preferably at your retirement, when your income and income tax bracket are lower.