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On 10/23/00, David Braze wrote at :

"If investment returns within your 401(k) plan and the Roth IRA are the same, and if your tax rate declines in retirement (when the money will be withdrawn), then you will not benefit from Roth IRA contributions."

He's talking about investments that are made AFTER the 401(k) employer-match has been maxed out.

Am I missing something? I thought that 401(k) contributions and earnings are ordinary income when withdrawn and are taxed a such. In contrast, assuming the Roth IRA is held long enough, all withdrawals from the Roth IRA are federal income-tax free.

It seems to me that if investment returns are the same, then it does not matter what the tax rate is -- the Roth IRA wins.

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