# Tax Deferral

*Taxes — Finicade finance glossary*

Tax deferral means paying tax later rather than now, which is valuable because the money you would have paid keeps compounding in the meantime. Over thirty years, deferral alone can add tens of percent to a final balance even at an identical tax rate. The bet embedded in it is that your rate in retirement will not be higher than today's, which is why deferral and Roth-style accounts suit different career stages.

**Also known as:** tax deferred growth

**Related terms:** [Tax-Advantaged Account](https://finicade.com/glossary/tax-advantaged-account), [401(k)](https://finicade.com/glossary/401k), [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [Unrealized Gain](https://finicade.com/glossary/unrealized-gain), [Required Minimum Distribution (RMD)](https://finicade.com/glossary/required-minimum-distribution)

Source: https://finicade.com/glossary/tax-deferral