How do taxes impact your accumulation? Solution There are three asset items during the accumulation duration . The 401(K) assets are tax deferred and so there is no tax on them during this period. The real - estate is also a tax deferred asset , because taxes on them are not paid until the property is sold. Any investment in stock portfolios are not taxed during the accumulation period. They are taxed on the capital gains from the portfolio realized along the way . The stock portfolio however does generate income on a regular basis in the form of interest and dividends are they are taxed during the accumulation period. During retirement the taxes payable would be calculated as follows : .