Deferring taxes to the future means that you put off paying taxes on your current income now then pay taxes on the money when you withdraw it at retirement. The following are two key recommendations:

1. Invest as much as your budget will allow in your 401(k) and your other tax-deferred retirement plans, especially if they are matched accounts. Individual retirement accounts, 401(k) plans, and SEP IRA plans defer taxes to the future.
2. Invest in specific-purpose investment vehicles that eliminate all future taxes. You invest in these vehicles with after-tax dollars, and if the assets are used for the purpose that you specified, you never pay taxes on the earnings again. The following are some recommendations:

• Save for retirement using a Roth IRA or Roth 401(k). Earnings on a Roth are never taxed.
• Save for your children's educations using an Education IRA or a state College 529 Savings plan. Earnings from these assets are never taxed again, assuming they are used for qualified educational expenses.
• Save for your children's college tuition expenses using government Series EE or Series I savings bonds. If the principal and interest are used to pay for college tuition, the interest is tax-free. Focus on your rate of return and your tax rate. If your after-tax return on these vehicles his higher than you could make other places, it may be a good place to invest for your children’s education.

As you understand that your financial resources are your stewardship and that you need to be the best steward you can, you will work to understand the tax system so you will pay all the taxes that are legally due—and not a penny more.