8. Choose the best answer.
tax-free
Money put in a retirement plan that is not taxed until a future date is called contributions.
Osavings-enhanced
tax-deferred
inflation-protected



Answer :

Final answer:

Tax-deferred retirement plans offer tax-saving benefits by allowing contributions to grow without immediate taxation, ensuring potential compound growth over time.


Explanation:

Tax-deferred retirement plans allow individuals to contribute money that is not taxed until withdrawal, providing tax benefits. These plans, such as 401(k)s and 403(b)s, involve both employer and employee contributions and offer investment opportunities.

The contributions made to tax-deferred plans accumulate without being taxed immediately, enabling potential growth through compound interest over time. Withdrawals from these plans occur at retirement age and are then subject to taxation.


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