GeneralThe WorryFree Retirement® Blog

Understanding Government Taxation

By June 7, 2022 No Comments

Check out the video below to learn about the four types of government taxation.



If you think you’re the only one that hates paying taxes – Think Again!

More and more savers are fed up paying more and more taxes. According to the Harris Poll, 57% of U.S. adults believe they are taxed at unfairly high rates.

Nowadays everyone is trying to find loopholes when it comes to paying taxes. The best way to avoid paying unnecessary taxes is by understanding them better! Do you know what type of tax treatment your money will receive?



After-Tax Taxable

- This would include accounts or investments such as Certificates of Deposit (CDs), Mutual Funds, Stocks, and REITs. Investments that you’ve put ‘already taxed’ dollars into, but the gains on that money will yet again be taxed.

Pre-Tax Tax-Deferred

- In the world of Retirement Planning, these accounts are prevalent! 401(k) Plans, IRAs, 457 plans, 403(b) employer plans. These accounts are funded with pre-tax dollars and will be taxed as the money is converted to cash and used.

After-Tax Tax-Deferred

- Annuities, Life Insurance cash value, Capital Gains on stock and Savings Bonds all enjoy tax-deferral, which means you won’t have to claim the gains each year, but if and when you move money out – that’s when the tax man comes calling.

After-Tax Tax Free

- Finally, Roth IRAs, Life Insurance death benefit, Municipal Bonds, Home Equity and gifting money are all after-tax dollars that will remain tax free.

Leave a Reply