Pretax 401k compounding worth taking over Roth tax advantages in the future?

The amount in your bank account is the same. But in a Roth IRA, you've deferred paying taxes for thirty years, during which time you've earned interest on that tax not paid. Outside the IRA.

I won't be agreeing that we want to be using only nominal dollars in this comparison. The world we live in uses real dollars. And inflation exists, so we want to defer paying taxes as long as we can, as long as the actual dollar amount is the same now, as it thirty years from now.

It's easy to say (and, it's true) that the amount is the same using either form of IRA. But you can't deny the value of deferring tax payments (or we'd all be pre-paying our taxes thirty years early).

Unfortunately, there are a lot of variables in play here, not all of them in the IRA.

/r/personalfinance Thread Parent