The Power of Tax Deferral

“Compound Interest is the eighth wonder of the world. He who understands it, earns it; He who doesn’t, pays it” – Albert Einstein

This quote gives me an unbelievable amount of joy to read. It reminds us that we all work too hard in life to be on the losing side of compound interest.

Compound interest doesn’t just have to refer to the interest you earn on cash in your savings account. It can also refer to the power of tax deferral. By investing money into a qualified account (i.e. 401k or IRA), you’re lowering your tax bill today, investing into the market during all market cycles, and allowing your money to compound over time. Furthermore, you’ll be withdrawing the money in retirement, when your tax rate will likely be much lower than it is now.

Which leads me to another quote:

“Do not save what is left after spending; instead, spend what is left after saving” – Warren Buffet.

Sage advice from two of the greatest minds in the history of the world!

We’ve attached the 2024 Contribution Limits and Tax Guide, which shows you just how much tax deferral you can benefit from this year.

Don’t hesitate to reach out for a free consultation to see where you stand for accomplishing your life goals.