No. of Recommendations: 1
As I am new to these message boards - Sorry for the duplicate  
(Tab keys like to take me to the submit buttons :^(  )

Trying to get my head around the ROTH and the fact that compounding
seems to be discounted when talking about it.

At 30, I have $5000 to invest per year and I am in the 25% tax bracket.

   IRA - $5000 invested per year   ROTH - $3750 invested per year

At age 65, with 8% compounding returns I will have the following:

   IRA - $1,010,351.60      ROTH - $ 757,763.70

At age 66 I take out enough not to disturb my principal.

   IRA - $80,828.13 - (28%tax bracket)$17,138.38 = $63,689.75
   ROTH- $60,621.10 tax free = $60,621.10

To simplify things my assumptions:
- No profit sharing or matching funds for IRA
- Retirement income will be only income
- Tax brackets stay the same

I know this is a simplistic model but to me it shows that 
compounding benefits outweigh the reduction of tax upon withdrawl. 
What am I missing?

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