What is the purpose of tax-deferred retirement accounts?

A. To encourage consumers to invest money before it is taxed

B. To level high taxes on a consumer at retirement age

C. To collect taxes during retirement at higher rates

D. To trick consumers into investments that will incur fines and penalties

Question

Advanced Placement (AP)

Valentina Cisneros

14 January, 00:55

What is the purpose of tax-deferred retirement accounts?

A. To encourage consumers to invest money before it is taxed

B. To level high taxes on a consumer at retirement age

C. To collect taxes during retirement at higher rates

D. To trick consumers into investments that will incur fines and penalties

+5

Answers (1)

Know the Answer?

Tatum Bush · Answer 1

The idea is to put time on your side, allowing years of investment savings and income to compound, without having to pay tax on it. You can accumulate tax-deferred savings in several ways: Fund tax-deferred accounts like an IRA or employer-sponsored retirement plan such as a 401 (k), 457 or 403 (b) plan./

answer is b

What is the purpose of tax-deferred retirement accounts?A. To encourage consumers to invest money before it is taxedB. To level high taxes on a consumer at retirement ageC. To collect taxes during retirement at higher ratesD. To trick consumers into investments that will incur fines and penalties