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In the US, with a Roth, if you start withdrawing at 59 1/2 the earnings are not taxed. If you contribute $100,000 (after tax) the Roth and it grows to $300,000
by vmh1928 5y ago
In the US, with a Roth, if you start withdrawing at 59 1/2 the earnings are not taxed. If you contribute $100,000 (after tax) the Roth and it grows to $300,000 you can withdraw the $200,000 earning tax free. (you can also withdraw your contributions tax free of course.) So that matters.
[edit: the account has to have been open for 5 or more years.]
- niij 5y agoBut a $100k Roth contribution would have been a larger pre-tax contribution (maybe $130k or so). That would have compounded to be larger than $300k all things being equal. If you do the math on it as long as your tax rate is the same in retirement there's no difference between traditional vs Roth.