50 • RUBY, WILDING & SWANSBURG Before we go on, I want to make something clear: I’ m not a CPA. I’ m not a tax professional of any kind, just a saver with a background i n tax poli cy. I also do n’t kno w your situatio n. That’s one of the limitations of a book. You should consult a tax pr ofessio nal about any s pecifi c que stions you h ave. With that in mind, I want to give you a general understanding of today’s tax environment and how it could impact your retirement funds. So, here we go. How Americans Save . . . And How They’re Taxed Because of It Perhaps you’ve already given some basic thought to the tax status of your retirement accounts. Perhaps—like many savers—you haven’t thought much about it at all. Retirement savings tend to fall under one of three common tax statuses: • Tax-Deferred Accounts: This is the most common way Americans save by far, and I’ m willing to bet some of your savings are in a tax- deferred vehicle. 24 Tax- deferred account s, sometimes called qualified accounts or defined contribution accounts, include 401(k)s and IRAs, as well as public employees’ 457 plans and teachers’ 403(b)s. The money saved in these accounts are not taxed at the time of contribution. So, if you saved $6,000 in an IR A this year, you can deduct $6,000 fro m 24 Employee Benefits Survey. U.S. Bureau of Labor Statistics. March 2016. “Retirement Benefits: Access, Participation, and Take- up Rates.” https://www.bls.gov/ncs/ebs/benefits/2016/ownership/private/table02a.htm
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