Financial Answer Center > Investing & Investments
Tax-Deferred and Tax-Free Investments

Introduction

Retirement plans including traditional 401(k)s and deductible IRAs, grow tax-deferred. In addition, there are certain investments which earn income that is not currently taxable, such as Series EE and Series I Savings Bonds, certain tax favored education plans, annuities, and cash value life insurance. And, if the Series EE and Series I savings bonds and education plans are used for college, you may never pay tax on the income.

Roth 401(k)s, Roth 403(b)s, and Roth IRAs are considered tax-free investment accounts. Provided you adhere to the holding period requirements established by the IRS, qualified withdrawals from this type of IRA are never taxed.

SUGGESTION: The monies in your retirement plans are growing on a tax-deferred basis (tax-free in a Roth 401(k), Roth 403(b), and Roth IRA); that is, the earnings are not being taxed while they are in the retirement plan. Since you're already getting a tax-deferred benefit, don't invest any of your funds in tax-exempt investments within a retirement account. It may be prudent to consider investing in higher yield taxable investments.

Share Article:
Add to GooglePlus
IT IS IMPORTANT that our customers understand that products and services made available through Osaic Institutions, Inc.
  • ARE NOT A DEPOSIT
  • ARE NOT FDIC-INSURED
  • ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
  • ARE NOT GUARANTEED BY THE BANK
  • MAY GO DOWN IN VALUE
Any questions about this should be taken up with an Osaic Institutions,Inc Representative or any bank officer.

Important information about procedures for opening a new account

To help the government fight the funding of Terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means to you: When you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.

Investment products are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Insurance products offered through Osaic Institutions, Inc.
BrokerCheck