The relationship between Wall Street and Congress has always been a tug of war over the amount of money made by investors on Wall Street and the amount of that sum that Uncle Sam deserves in taxes.

Wall Street would prefer that as little as possible of its investors’ earnings be taxed. Congress doesn’t see it that way, asking investors to dig into their pocketbooks and ante up some of the proceeds from their portfolio gains.

That's why you may not enjoy your golden years as much if you don’t take advantage of tax-free and tax-deferred investments.

Thus the importance of our third quadrant – avoiding taxes. I see way too many cases of people making the same mistakes with their retirement plans that cost them plenty in additional tax payments.

I see people withdrawing too little from their retirement plan. At age 70-1/2, you have to begin making at least minimum withdrawals, based on the life expectancy tables, even if you're still working. Otherwise, you will pay a 50 percent penalty on the minimum amount you failed to withdraw.

The first withdrawal must be completed by April 1 of the year after you turn 70-1/2. But people forget about the date and wind up paying taxes they could have avoided. Same with withdrawing too much from your retirement plan. I see people with $1 million saved up for retirement. Again, when you reach 70-1/2 and have to start withdrawing funds, your minimum might be over $150,000 a year. If so, or if you have a lump sum withdrawal of over $750,000, you'll pay an extra 15 percent tax on any amount over those ceilings.

There are also plenty of people not taking advantage of loopholes in the US tax code like tax-deferred investments, and estate planning tools like trusts and annuities.

Obviously, saving for retirement should be one of your main financial goals. Fortunately, the tax code provides several tax-favored retirement options. A common feature of these options is that the account’s earnings grow tax-free year to year. That’s important over time because it allows the earnings to compound at a higher rate (a great inflation fighting tool, by the way). In the next few blogs, I’ll put together a general description of some of the more common tax-favored plans.