No. of Recommendations: 1

30% tax bracket at all times
10% annual growth of investments

The first column shows the pre tax value of the 401k starting with 10,000
The second column shows the after tax value of the 401k
The third column shows the same money in a ROTH- after tax (you have to pay tax to put it in, so it starts with less)

401k 401k ROTH
1 10000 7000 7000
2 11000 7700 7700
3 12100 8470 8470
4 13310 9317 9317

It appears they are identical with a fixed tax bracket. However, if the tax bracket changes when you get older (and your tax bracket will probably go down), then you will be better off with the 401k. (you will get a greater percentage of the left hand number) If you think your tax bracket will go up (or the government will raise taxes in the future) you are better off with the ROTH (because then it will be larger than a smaller part of the left hand number)
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