Things You'll Need
Ask your employer about the availability of a 401(k) plan. Most large private employers will offer some sort of 401(k) plan to help their workers save for their own financial futures. If your employer is in the public sector, you may have access to a 403(b) plan.
Sign up for any employer-sponsored plan. The funds you divert to a 401(k) or 403(b) plan will not be subject to current income taxes, and the funds will be allowed to grow on a tax deferred basis. That means that the funds will not be subject to taxation until you start drawing them out when you retire.
Calculate how your 401(k) or 403(b) deferrals will affect your paycheck by using an online calculator. There are some excellent financial calculators available at sites like Yahoo! Finance, Bankrate.com and others.
Consider investing in a deductible IRA, also known as a "traditional IRA," as well as an employer-sponsored plan.
If you meet the income eligibility guidelines, you may be able to shelter additional income from taxation by investing in a tax deductible IRA. The amount of money you invest in a deductible IRA will be deducted from your taxable income when you file your federal return.
Contact your insurance company to inquire about the deferred annuity options they offer. Deferred annuities are insurance contracts that are designed to provide long term growth, and they are often used for retirement planning and other long term goals. Since the interest earned by these insurance contracts is deferred, there are no taxes due until the funds are withdrawn.
Consider deferring the profits on appreciated real estate into the following tax year by moving the sales date to the following year. If you are selling your home or an investment property and the buyer agrees, you can move the sale date and defer any capital gains taxes until the next tax year.