What‘s the advantage of tax-deferred investing?

In a tax-deferred investment, such as your retirement plan at work or a traditional IRA, the money in the account accumulates tax-deferred, so you don't pay taxes until you take it out. This means you have more of your money working for you over the years because Uncle Sam hasn't taken his share yet.

Try our calculator below. It's designed to show you that tax-deferred investing in a retirement plan or traditional IRA can provide more money in your account than if your investment was currently taxable, like investments is a brokerage account. Of course, with a tax-deferred investment you'll still need to pay taxes on any withdrawals; tax penalties may also apply on withdrawals taken before age 59 1/2, unless an exemption applies.

Keep in mind that the calculator doesn't consider Roth (after-tax) contributions to a retirement account. Roth contributions are made with money that's already been taxed, so you won't have to pay taxes on qualified withdrawals, including earnings.

General information

  How much of your pre-tax income is targeted for savings each month?


  How long until the income is needed?


  Which best fits your tax situation?

  Single     - or -    Married (filing jointly)