Tax-deferred accounts

Contributions to any of these accounts, such as 401(k)s, 403(b)s, and the traditional IRAs, usually reduce your taxable income dollar for dollar when you decide to make the contribution. Even more, pretax contributions and gains aren’t always taxed before retiring, so withdrawals are subject to ordinary income tax rates.

There’s impossible to leave your savings in these accounts forever, as the IRS asks you to take the required minimum distributions (RMDs). And that can only be done from your tax-deferred savings account every year after you reach 72 years old unless you are still working and contributing to an employer’s plan.