Business and Personal Finance Dictionary

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• TAX-DEFERRED
  
  When an investment you make or the earnings on your investment are tax-deferred, it means that you can postpone paying income tax until you begin withdrawing from the account in which the investment is held. That allows your earnings to compound more quickly. You can make tax-deferred contributions to qualified retirement plans, such as a 401(k). You collect tax-deferred earnings in those plans as well as in traditional individual retirement accounts (IRAs), fixed and variable annuities, and some insurance policies.
  
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