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The purpose of this calculator is to illustrate what the return on your investment looks like if your investment is in a tax deferred investment account or if it's in a taxable investment account. The benefit of the deferred account is that you don't have to pay the tax today, it is deferred (put off) until the future. The theory behind this is that when you need the money you can withdraw and use the money when it will be taxed at a lower rate. This will allow you to have a larger base in which to grow your invested assets.