So, there is no separation of tax rate between contribution and gains ?Correct. And it is for this reason that people sometimes recommend holding stock that you intend to hold for the long term in a taxable account. If you held the stock in a taxable account, then the gain would be taxed at your capital gains rate, which maxes out at 15%.If you held the stock in your 401k, then you'd effectively be taxed at your marginal tax rate when the dollars are distributed from the account.
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