Living in Florida provides some unique financial advantages — no state income tax, favorable estate tax laws, and an ever-growing population of high-net-worth retirees and professionals. But if you’re serious about building wealth efficiently, it’s not just about where you live — it’s about how you invest.
One of the most powerful strategies I use with clients across the state is tax deferral — putting off taxes today so you can grow your wealth faster and pay less later. At Manna Wealth Management, we help Floridians strategically use tax-deferred vehicles to build long-term value while minimizing current tax burdens.
Let me walk you through the best tax-deferred investment options for 2025 — tailored specifically for Florida residents.
Why Tax Deferral Matters
When you defer taxes, your money grows on a pre-tax basis, giving you more compounding power. For example:
- A $100,000 investment growing at 7% annually for 20 years after tax (assuming a 30% tax rate) will grow to about $260,000.
- That same investment tax-deferred will grow to over $386,000 — a difference of more than $120,000.
In Florida, where your retirement income won’t be taxed at the state level, this strategy becomes even more valuable.
1. Traditional 401(k) and Employer-Sponsored Plans
If you’re employed or self-employed, this is often your first and most important vehicle for tax deferral.
- 2025 Contribution Limit: $23,000 (or $30,500 if age 50+)
- Contributions are made pre-tax, reducing your taxable income
- Funds grow tax-deferred until withdrawal
Florida Example: A Fort Lauderdale physician earning $300,000 per year can contribute the max and reduce taxable income by $30,500 — while compounding returns inside the plan.
Pro Tip: If your employer offers a 401(k) with Roth and Traditional options, we can model which is more tax-efficient based on your long-term goals.
2. Traditional IRA
For individuals not covered by a retirement plan at work (or with income below IRS thresholds), the Traditional IRA remains a great option.
- 2025 Contribution Limit: $7,000 (or $8,000 if 50+)
- Contributions may be deductible depending on income
- Grows tax-deferred until retirement
In many Florida households, spouses who don’t work outside the home can open spousal IRAs to double the tax-deferred savings.
3. SEP IRA or Solo 401(k) for Business Owners
Florida has a booming entrepreneurial scene — from real estate agents in Miami to consultants in Naples. If you’re self-employed, these plans let you shelter far more income than a regular IRA.
SEP IRA:
- Contribute up to 25% of income (up to $69,000 for 2025)
- Easy to set up and administer
Solo 401(k):
- Offers employee + employer contributions
- Ideal for solopreneurs or family businesses
- May include Roth option + loan provisions
At Manna Wealth Management, I helped a Sarasota-based interior designer reduce her taxable income by $40,000 using a Solo 401(k) and still grow her retirement fund aggressively.
4. Deferred Annuities
A fixed or variable annuity allows for tax-deferred growth — often without the contribution limits that traditional retirement accounts have.
- No IRS contribution limits
- Gains are taxed only upon withdrawal
- Can provide guaranteed income for life
While annuities are not right for everyone, I’ve seen them work well for conservative retirees in places like The Villages or Boca Raton who want stability and long-term growth without triggering immediate taxes.
5. Health Savings Account (HSA)
This is the triple-tax advantage tool everyone should consider — especially high earners with high-deductible health plans.
- Contributions are tax-deductible
- Growth is tax-free
- Withdrawals for qualified medical expenses are tax-free
2025 Limits:
- $4,150 for individuals / $8,300 for families
- +$1,000 catch-up if age 55+
Florida Insight: Retirees moving to Florida often underestimate future medical costs. An HSA can be used tax-free to pay for premiums, dental care, vision, and even long-term care insurance in retirement.
6. Cash Balance Pension Plans (Advanced Strategy)
This is one of the best-kept secrets for high-income professionals, especially in Florida where many own their own practice or business.
- Contributions can exceed $150,000+ per year
- Acts like a traditional pension but with tax-deferral and investment control
- Great for doctors, attorneys, consultants, and partners nearing retirement
We implemented a custom cash balance plan for a Tampa-based law firm partner that allowed him to defer over $180,000 in 2024 alone, while boosting retirement savings by 20% in one year.
Bonus Tip: Combine Strategies
In Florida, where your state tax burden is already low, combining federal tax-deferred accounts with state exemptions can create a powerful financial plan.
A client of mine in Naples uses:
- A Solo 401(k)
- A HSA
- A tax-deferred annuity
- And a 529 plan (for grandchildren)
This strategy has lowered their taxable income, funded their healthcare and education goals, and kept their money working efficiently.
Final Thoughts: Tax Deferral Is a Strategy, Not Just a Tool
As we look ahead to 2025, smart tax planning isn’t just about deductions — it’s about growing your wealth in the most efficient way possible. Every dollar you don’t pay in taxes today can work harder for your future tomorrow.
Whether you’re nearing retirement, running a business, or just getting started, I’d love to help you evaluate your options. As a Florida financial advisor with deep experience across retirement, tax, and investment planning, I’ll work with you to build a customized strategy that fits your goals and lifestyle.
Let’s talk about how to grow your wealth — and pay less doing it.
