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I'm not sure I quite understand the gist of this thread.

Certainly, capital gains from a tax deferred account will be taxed at a higher rate than those from a taxable account. The point is that you're able to put more money into the account in the first place, isn't it?

I can put $20,000 a year into my 401K. That saves me $7K in taxes. So if the money quadruples before I touch it through capital gains and dividends I have $80K. If I pay even 35% income tax when I spend it the tax bill comes to $28K, which is what the $7K tax savings are now worth.

And if my biggest problem is that the money in my 401K has quadrupled I'm doing pretty well anyway.
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