Taking into consideration how taxes will impact saving for retirement and during retirement is important. As you are meeting with your tax professional, it may be a good time to discuss your tax strategy to save money while saving for retirement and also once you transition into retirement.
There are several types of retirement accounts available to meet your tax and retirement goals.
Tax-deferred: Pre-tax plans such as a 401(k), 403(b), and 457(b) take your deductions pre-tax, reducing your taxable income but will be taxed upon withdrawal at your normal tax rate.
Tax-exempt: Roth 401(k), Roth 403(b) and Roth 457(b) are post tax contributions that have a tax benefit at the time of withdrawal.
For some individuals, it may be beneficial to have a mix of Tax-Deferred and Tax-Exempt accounts. Talk to your tax professional and CAPTRUST or TIAA Financial Consultants to determine what is best for you!
