What are tax deferrals?

Tax deferrals are like getting to eat your cookie after you finish your vegetables, but you still get to enjoy it later.

Imagine you have some money that you can use to buy toys, candy, or even a new bike. Normally, the government takes a piece of that money as tax, kind of like when Mom takes one of your cookies before letting you eat them all. But with tax deferrals, you get to keep that whole cookie (or toy) now, and you'll pay for it later, maybe when you're older or have more money.

Think of tax deferrals like putting your money into a special piggy bank. You don’t pay the tax right away, so it's like the government is letting you keep that money to grow bigger while they wait. Then, later on, maybe when you're 18 or even older, you'll take out the money and pay the tax at that time.

It’s not magic, it’s just a smart way of managing your money so you can save more now and pay later.