"Why would you want to pay taxes?" Usually, when saving for something other than retirement, using income-taxable investments is the best way to go. Sure, lots of people use income-taxable investments to save for retirement. But that's only after they've exhausted all their tax-deferred options. Taxable investments may appeal because they allow easier access to money, or because they offer variety.

These after-tax investments include:

• Cash...also known as short-term securities...is money you can get your hands on relatively easily, such as a bank savings account. It tends to be low risk and low return.
• Bonds...sometimes called fixed-income securities...can tie up your money for awhile but may pay income along the way. Bonds offer moderate risk and return.
• Stocks...sometimes called equities...have higher risk, but also can have higher potential for returns.

Each of these investments can be invested in either qualified and non-qualified accounts. Both options have unique tax implications that should be determined prior to making an investment decision.

"One word of warning..." Stocks and bonds are mighty alluring. But when planning for your retirement, tax-deferred saving is good for you. Have you maxed out your employer-sponsored plan? Have you explored other tax-deferred options?