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Greetings, Teddywu, and welcome. You wrote in part:

<<But did the analysis neglect to account for the future value of yearly tax savings of $560 invested at a IRR of 10% for 30 years ($2000 * 28% tax bracket) in the Traditional IRA case? the sum is something like $92,XXX

Can someone confirm this? From this additional contribution, it looks like traditional IRA is far better than a ROTH IRA.>>

See my analysis of this issue on this board at . In general, if you make a $2K contribution to a deductible IRA versus a tax-equivalent nondeductible contribution to a Roth IRA and if your tax rate falls in retirement, the deductible IRA will win. If your tax rate stays the same, it's a wash. If your tax rate increases, the Roth wins out. OTOH, if you contribute the full $2K to a Roth, then it will win over the full contribution to a deductible IRA even after consideration of an alternative investment of the $560 if your tax rate is the same or higher in retirement. The deductible IRA will be better only if your tax rate falls. See the link for details.


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