When it comes to paying taxes, it is always nicer to pay less or get a refund. One way to decrease one's income tax burden from year to year is to defer taxes by investing in a 401(K) or IRA.
The way these accounts work is that money is put into them untaxed, allowing them to grow in various kinds of funds. When money is withdrawn in retirement, taxes are taken out as well. Those who withdraw more will be taxed at a higher rate while those who withdraw less will fall into a lower tax bracket.
