Individuals commonly assume that once they retire, they’ll automatically be in a lower tax bracket since they’re no longer working. Income tax rates have been steadily declining, according to 2013 data from the Tax Foundation. Tax-deferred accounts are the traditional retirement accounts discussed above. By saving in all three types of accounts, tax diversification, flexibility and greater benefits can be achieved. There is the potential for an additional 3.8% net income tax if your income is above certain thresholds.

Source: Forbes September 10, 2018 12:22 UTC