tgiletto,

>>This may or may not be true, but when you compare a $2000 Roth to a $2000 taxable account (i.e. not eligible for a standard IRA) then it is a big win.

I really don't see the "big win"?

Please explain.

I posted this before, but I can't find the link to it, so I will post this information again:

If one compares a Roth to a taxable account, assuming they get the same rate of return, the Roth comes out ahead because there is no capital gains tax on its increase in value.

I set up a spreadsheet with the following assumptions:

Tax Bracket - 28%
Annual Rate of Return - 12%
Capital Gains Tax - 20%

Here is the spreadsheet. The % Difference column is how much more the Roth returns over the Regular account. As you determined, a traditional IRA returns the same as a Roth after taxes.

Year	Roth		Regular     % Difference
                        Investment	
						
1	2240		2192		2%	
2	2509		2407		4%	
3	2810		2648		6%	
4	3147		2918		8%	
5	3525		3220		9%	
6	3948		3558		11%	
7	4421		3937		12%	
8	4952		4362		14%	
9	5546		4837		15%	
10	6212		5369		16%	
11	6957		5966		17%	
12	7792		6634		17%	
13	8727		7382		18%	
14	9774		8219		19%	
15	10947		9158		20%	
16	12261		10209		20%	
17	13732		11386		21%	
18	15380		12704		21%	
19	17226		14180		21%	
20	19293		15834		22%	
21	21608		17686		22%	
22	24201		19760		22%	
23	27105		22084		23%	
24	30357		24686		23%	
25	34000		27600		23%	
26	38080		30864		23%	
27	42650		34520		24%	
28	47768		38614		24%	

Hope this helps.

LT