How should younger people think about retirement taxes while saving for retirement?

When saving for retirement during our working years, we often want the greatest tax advantages available to us because we think our taxable income may be higher during our earning years than in retirement. However, for many that is not the case. Prior to retirement you may have mortgage interest to deduct, 401K or other retirement plan deductions and children to claim on your tax return. In retirement, if you plan well, you may have no mortgage interest or children to claim, to deductions for retirement plan contributions and your income may not be much different than when you were working.

Here is what I recommend. Balance how you invest between taxable, tax deductible and tax deferred investments. By having money in all three areas, when retirement comes, you will have more control over how your income is taxed based on where you take withdrawals from. It is important to keep from having most all of your assets in tax deferred positions in retirement.