Your Financial Road Map

Tax Efficient Retirement Planning


On a scale of 1 to 10, with 1 being the most important and 10 the least; How important is implementing tax-avoidance into your overall financial plan?

........What steps have you taken in this regard?....


What is the difference between tax-deferred and tax-free?

In summary, tax-free means you paid the taxes on the initial investment today, but you don't have to pay taxes on earnings or withdrawals in retirement.

While tax-deferred means you postpone taxes to your investment until a later date when you withdraw the funds, usually during retirement.

Most people would like to avoid or greatly reduce taxes at retirement.

Creating an efficient tax-avoidance strategy can be a key factor in your financial plan. 


Simply, it is either paying tax on your income now or later in retirement. Which is the best way to structure your plan? 

The answer is .... it depends. Everyones situation is different.


Understanding the right income creating tool for your financial road map, starts with learning what is available. 


There are different paths to take to create your retirement income streams, below are some of the more common tax-free and tax deferred vehicles used. 


Tax-free vehicles:

  • Roth IRA 
  • Roth (401(k),403(b))
  • Cash Value life insurance - correctly structured IUL (Indexed Universal Life Insurance) 
  • 529 plans (unless not used for qualified education expenses)
  • Municipal bonds (generally are but may have exceptions depending on situation)


Tax-deferred vehicles:

  • Traditional IRA
  • 401(k)
  • 403(b)/457
  • Annuities
  • Simple/SEPs
  • Defined Benefit or Defined Contribution Plan
  • Cash Balance Plans
  • Pensions
  • Long-Term Capital Gains

The specific rules and regulations governing tax-free and tax-deferred accounts may vary depending on your jurisdiction and the type of account or investment involved.


Connect with me today to discuss the strategies that may fit best in your financial plan.

Registered Representatives of Equity Services, Inc. do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor.