Top marginal tax brackets, 1913 to 2026

Created in the Revenue Act of 1978 as a cash-or-deferred arrangement under the tax code, then expanded in practical use after IRS guidance in 1981. It evolved from a narrow provision into the mainstream employee savings plan.

Established by ERISA in 1974 to give workers without employer pensions a tax-advantaged retirement option. Eligibility broadened in 1981, helping the IRA become a core personal savings and rollover vehicle.

Created by the Taxpayer Relief Act of 1997 and effective in 1998. It introduced after-tax contributions with tax-free qualified withdrawals, adding a powerful tax-diversification option to retirement planning.

Began in 1958 as a tax-sheltered annuity arrangement for certain nonprofit employees, expanded to public-school employees in 1961, and later added mutual-fund custodial accounts in 1974. It evolved into a broader workplace plan for educators and nonprofits.

Added in 1978 for deferred compensation in state and local government, extended to tax-exempt organizations in 1986, and strengthened for governmental plans in 1996 with trust and custodial requirements. It became a major public-sector supplemental retirement plan.

The death benefit exclusion is as old as the income tax itself, arriving with the Revenue Act of 1913. By 1932, with the top rate at 63 percent and banks failing, policy loans had reached 18 percent of every dollar insurers held, and cash value was the liquidity households actually reached for. The vehicle then changed shape: universal life unbundled cost from savings in 1979, TAMRA drew the modified endowment line in 1988, and indexed universal life arrived in 1997. The product kept evolving because the tax code kept moving.