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This has been discussed on this board before (with 19,000 posts, one should expect that it has been covered). Several people have posted tables they have generated from spreadsheet projections. In comparing traditional IRA's and ROTH IRA's they turn out to generate the exact same after-tax rate of return (if your post-retirement tax bracket doesn't change from when you make your contribution). Both of them generate a better after-tax rate of return than any account outside of an IRA, unless you can justify being able to getter a better rate of return on that account. Also, these projections generate slightly different results depending on its assumption of post-retirement tax bracket.

The ROTH IRA is the better investment if you can fund it at the full $2000 per year. This is because you can only put in $2000 PRE-TAX dollars into a Traditional IRA, while you can put in more PRE-TAX dollars into a ROTH IRA. The exact amount is dependent on your tax bracket. If you are in the 28% bracket, the amount is greater than $2800. Being able to put more pre-tax money into a tax advantaged account generates more money after retirement.

If you want to learn more, my suggestion to you would be to search this board for some of the past posts on this subject. Perhaps someone more organized than I am will post some links to previous threads on this subject.

Good Luck,

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