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Something people dont seem to understand: A roth IRA does not save you money unless the tax code changes unfavorably and at the time you exit the capital. The
by trident5000 5y ago
Something people dont seem to understand:
A roth IRA does not save you money unless the tax code changes unfavorably and at the time you exit the capital.
The math of taking the tax cut upfront (and then compounding your investment within) vs taking the tax cut later (after compounding) is actually the same.
- deleted 5y ago[deleted]
- hn_throwaway_99 5y agoThis is laughably false, primarily because this is not just a discussion between a regular IRA (taxed on exit) or a Roth (taxed on entry). The contribution limits mean many people have a much larger amount of income than they could feasibly put into either type of account. I mean, just look at how Thiel did it, it's not like he was trying to decide how to stash $1700. He saw it specifically as a way where he could buy a large amount of his shares at basically nothing because he knew if it grew he'd have a large amount of tax free cash to play with.
- trident5000 5y agoIts not false its math. Get a spreadsheet out. He could have bought more shares without being taxed up front and the end result would be the same.
- nrmitchi 5y agoThis is completely wrong for a huge number of people who are currently in a much lower tax bracket than they expect to be in the future (when they are withdrawing).