A tax-deferred retirement plan may lower your current taxable income, postpone taxes on earnings until withdrawn, and allow tax-free transfers among investment options.

Three popular investment vehicles can provide these benefits, and may help you make the most of your money over the long term. If possible, you should take advantage of all three.

First, contribute to an employer plan

If a 401(k) or 403(b) plan is available from your employer, take advantage of it. These plans can:

• Lower your current taxable income.
• Postpone taxes on earnings until withdrawn
• Usually allow tax-free transfers among investment options.
• Offer free money from employer matching of all or part of your contributions. (Keep in mind that employer matching may be subject to vesting schedules.)

Second, everyone should consider an IRA

An individual retirement account can:

• Sometimes lower your current taxable income.
• Postpone taxes on earnings until withdrawn.
• Usually allow tax-free transfers among investment options.

Third, consider an annuity

Annuities won't lower your taxable income, but they can postpone taxes on earnings until withdrawn. They also can add these other powerful benefits:

• Unlimited contributions.
• No required distributions at age 70½.
• Option of guaranteed income for life.
• A guaranteed fixed rate of return (in a fixed annuity and as an option in many variable annuities).
• A death benefit that passes the account value to beneficiaries, which may avoid probate, but is not tax free.