This presentation conveys how deferred qualified plans work and things to consider. |
Next, let’s look at the two major components of a deferred qualified plan. As we said, the plan does defer the taxation of the money saved in the account. We think a better word to describe this is postpone because the taxes will be due, just not today. The second thing the plan does is postpone the tax calculation. This means that we don’t know the tax rates that will be used to tax your savings in the future. Governments change tax rates over time and they may be higher or lower when your money is withdrawn. If the rates are lower, than you will have more after tax retirement income. However, if your rates go up, you will have less after tax retirement income. |
No math presented on this screen. |