Adriane Berg, founder of Generation Bold and author of Bottom Line’s Aging for Beginners blog, is concerned about the “great myth of tax deferral.” That is, on most types of retirement accounts, the owner defers paying income taxes on the money until retirement. Many people are excited about this because it allows them not only to save money on taxes when young but also to save for retirement. The problem, according to Ms. Berg, is that the taxes will come out of your retirement income. Not only does this decrease the amount of money you actually have saved for retirement, it also comes at a time when many people have fewer deductions to reduce their tax burden. There are, however, strategies for minimizing the amount you pay in these taxes. These include converting qualified accounts to a Roth IRA to prepay taxes…purchasing an annuity called a QLAC to further defer taxable distributions…and taking an advance on insurance death benefits to prepay your taxes on your taxable distributions.

For more great tips from Adriane Berg, check out her Bottom Line blog “Aging for Beginners,” visit her website, or purchase her most recent book How Not to Go Broke at 102.