A big decision for everyone saving and planning for retirement (in addition to basic estate planning, of course) is how to best take advantage of tax-deferred plans. A recent article on CNNMoney discussed this.
If history repeats itself, tax rates will continue to change over the years. You can do little to control what the tax rates are. The article points out that for traditional 401(k)s and IRAs, income is taxed at ordinary income rates when you start drawing on the account. Outside of these plans (e.g., for your personally-owned brokerage account), you face the lower long-term capital gains rates and potentially favorable dividend rates (a max of 20% in 203).
Based on this tax-rate differential, the article suggests that you can keep taxes down by keeping investments like stock index funds, stock ETFs, and dividend funds in your regular brokerage accounts–where they will be subject to long-term capital gain rates and holding bond funds and managed stock funds trading in tax-deferred accounts in your traditional 401(k) and IRA accounts. Many financial advisors can help factor in insurance and annuity products to that may also offer a tax deferred resource in retirement–depending on your retirement objectives.
In any case, it is wise to consider now what your tax rates might be in the future as you allocate your retirement savings. If you have questions about allocating assets between different types of retirement accounts, you should consult with your financial advisor. Generally, financial advisors are able to run informative scenarios that can illustrate a variety of variables, including variable investment return rates and tax rates.