Tax-deferral

A strategy used to postpone or delay tax payment until a later date. Common vehicles used to accomplish this include ERISA and non-ERISA retirement plans (i.e. 401K, 403B, IRA, SIMPLE IRA, SEP, etc.), deferred annuities, ESOP, and pure growth assets (non-income producing). Tax deferral is ideal for those whose future marginal tax rates will be lower than current marginal tax rates.