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What are the Advantages of tax deferred retirement plans?

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First off, there are very few, if any, disadvantages. Advantages include the basic concept that paying taxes later, in this case frequently much later, is much bettr than paying them now. Add to it, the taxes you don't pay you get to invest and earn a return on. Those earnings are generally tax deferred too. Special status of most qualified deferred plans means they are exempt from attachment or seizure, even during a bankruptcy. (Security of savings). There are generally methods to obtain hardship or special purpose early withdrawals. If the funds pass to your heirs, upon death, before or after you start withdrawing them, they generally pass without being taxed too.
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