Deferred account

Deferred account

A type of account that delays taxes on that account until some later date. An example is an IRA account.

Deferred Account

An annuity or other investment vehicle in which one does not pay taxes on the contributions until after withdrawal. Common examples of deferred accounts are a 401(k) and a traditional IRA. Generally speaking, one places a portion of his/her pre-tax income into a deferred account and allows it to be invested. Taxation is deferred until withdrawal from the account, generally after retirement.