Tax deferred
Money that grows without being taxed each year, with the income tax on it falling due later, when it is withdrawn, rather than as the growth happens.
Inside a tax deferred account, interest, dividends and realised gains are not taxed in the year they occur. Nothing is forgiven. The tax follows the money and lands when it comes out. In the United States the familiar examples are a traditional 401(k), a traditional IRA and a deferred annuity.
The gain is arithmetic rather than generosity. A dollar of growth that would have gone to tax this year instead stays invested and earns for every year after, so deferral quietly raises the rate at which a balance builds. The longer the horizon, the larger that gap grows, which the compound interest calculator shows directly.
The mistake is reading a deferred balance at face value. A traditional retirement balance is stated before tax, so what it can actually buy is less than the figure on the statement, and how much less depends on your marginal tax rate in the year you draw on it. Deferred is also not tax exempt: one postpones the bill, the other cancels it. In the United States, withdrawals from most traditional accounts must begin at a set age, so the timing is not entirely yours to choose.