Tax Deferment
Yes, yes, you've heard it a thousand times, invest in that IRA or 401k. We all know the mantra. But, consider these often under published points that make using an IRA or 401k even more attractive.
- Buy and sell investments with no tax implications - in my opinion this is one of the biggest advantages of tax-defered accounts: the ability to buy and sell without worrying about capital gains is priceless
- Invest up to $15.5k / year in your 401k - IRAs may have a $5k / year cap on how much you can invest tax-defered, but the limit in a $401k is nearly four times that amount, and when you leave your job you can roll over the whole thing to your IRA anyway
- Set yourself up to roll your standard IRA to a Roth IRA - don't forget that as long as you don't exceed the income limits you can rollover your standard IRA to a Roth without that pesky $4k / year limit on contributions; keep in mind that if you retire early your income will likely drop and the conversion income maximums will likely no longer be a factor
If you're looking for more information, check out the Wikipedia entries for IRAs or 401ks