54 • MARTIN H. RUBY
retire, you’re going to need your savings to GROW. If you’re sav- ing tax-deferred, all of that growth is going to be taxed. Think about it like a garden. Under a tax-deferred plan, the seeds are planted tax-free, but the entire harvest is taxed. Under a plan that pays taxes upfront, the opposite is true. You’re paying taxes on the seeds, but when it’s time to harvest, all of that grain is yours, tax-free.
Show Me the Numbers! Well, I’m an actuary, so I like to substitute numbers for opin- ions. I don’t need to tell you to save tax-free: I can show you. Lots of people ask me if this is the best strategy, and I’m a little embarrassed to admit that until recently I had never put pen to paper and proven it. So, earlier this year, I sat down and did the math. I was amazed at what I discovered. In a tax-deferred account, the growth is all going to be taxed when you withdraw it. So, you have to consider your overall tax
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