3 ms·
It does sound suspicious, but it works out. Let's say you have $100k to invest, have a 30% tax rate, and your investment will give you a 2x return by the time
by swimfar 5y ago
It does sound suspicious, but it works out. Let's say you have $100k to invest, have a 30% tax rate, and your investment will give you a 2x return by the time you're ready to withdraw.
Pre-tax investment: Invest $100k and it becomes $200k. You pay $60k in taxes and end up with $140k.
Post-tax investment: You pay $30k in taxes and invest $70k. That $70k becomes $140k.
- deleted 5y ago[deleted]
- ac29 5y agoThat falls apart if you are maxing the contribution though. A maximum contribution to a Roth IRA is going to be more valuable than a maximum contribution to a Traditional IRA. Yes, technically with the latter you will have more money left to invest in a separate taxable account, but not being able to defer taxes will drag on the investment return.