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Greetings, Malakito, and welcome.

My wife and I have recently received or read several recommendations that we reduce our 401(k) contribution and fund Roth IRAs.

From a wealth accumulation point of view, is this Wise? Or Foolish?

I decided to do a very simple analysis in Excel, and from what I did it came up an absolute wash. Since most Roth vs. traditional IRA calculators on the WWW have indicated to me that a Roth is the better choice, and since traditional IRAs and 401(k)s act similarly with respect to tax treatment in my case (I'm 29 and all of this money is for retirement), and since everyone is saying do the Roth, I was surprised at my analysis.

You discovered that when all is even on a tax-equivalent basis and in returns, then there is no difference. Do read KAT's Board on the Roth that Nizac mentioned. Additionally, I encourage you to read the analysis I posted in this folder at . Both references will give you some perspective on the matter.


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