Some savings vehicles, such as certificates of deposit (CDs), work in such a way that you are usually taxed on earning every year.

So, for instance, the Internal Revenue Service (IRS), would require you to report yearly earnings or gain on a 1099INT form (or equivalent).

Other vehicles, such as various annuities (such as Traditional Individual Retirement Accounts/Annuities -- or IRAs -- Roth IRAs, and Non-Qualified Annuities) allow owners to defer paying taxes until they begin taking distributions. (Usually, these begin in retirement -- after age 59 1/2 -- or by age 70 1/2, if the vehicle is susceptible to Required Minimum Distributions -- or RMDs.)

I get more in depth into RMDs, here:

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And here:

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In this video, I survey some of the reasons why tax-deferred growth can be attractive and desirable.

Disclaimer: I am not a financial adviser. This video is for general informational or entertainment purposes only. It is not to be construed as provided financial, insurance, investment, legal, retirement, or tax advice or any kind. For personalized recommendations, consult a licensed professional near you.

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