Retiring
Your golden years will be more enjoyable if you take advantage of the many tax breaks afforded by retirement plans.
A traditional IRA contribution could produce a tax deduction when you file your tax return. Remember, though, that you'll have to pay taxes on this account when you start taking out money in retirement.
With a Roth IRA, you put in already-taxed money, but that means eventual distributions from a Roth are tax-free. The biggest drawback to a Roth is that you can't open or contribute to a Roth if you make a lot of money. However, regardless of your income, you can convert a traditional IRA to a Roth.
Workplace retirement plans, usually known as 401(k)s or Roth 401(k)s, offer similar retirement saving options, but with a nice bonus. Many employers match some of your plan contributions, which helps your retirement savings grow more quickly.
Social Security benefits generally are tax-free as long as you don't have a lot of other income.
And if you do have to file a tax return when you're older, you can claim a larger standard deduction amount simply because you're age 65 or older.