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<blockquote data-quote="satellitedriver" data-source="post: 675783" data-attributes="member: 1664">15% over time is big money. I pray he/she is doing it in a tax deferred or tax exempt Roth account.The tax rate is based on a sliding scale. Each section of money earned is taxed at a different percentage. This is termed the effective tax rate.Last year, $120,000 dollars on a simple W2 with no deductions had an effective rate of 13.50%Your question was why one would prefer to defer taxes.Good question. Simple math is the answer. The small percentage saved can compound,and hopefully, be taxed at a lower rate when one is retired and has a reduced total taxable income.</blockquote>

[QUOTE="satellitedriver, post: 675783, member: 1664"] [B][COLOR=DarkGreen] 15% over time is big money. I pray he/she is doing it in a tax deferred or tax exempt Roth account. The tax rate is based on a sliding scale. Each section of money earned is taxed at a different percentage. This is termed the effective tax rate. Last year, $120,000 dollars on a simple W2 with no deductions had an effective rate of 13.50% Your question was why one would prefer to defer taxes. Good question. Simple math is the answer. The small percentage saved can compound,and hopefully, be taxed at a lower rate when one is retired and has a reduced total taxable income. [/COLOR][/B] [/QUOTE]

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