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You are absolutely, 100%, with no doubt, without exception correct in your interpretation. And that's why the argument concerning "average" taxation rate is often erroneous when looking at the Roth versus traditional IRA, particularly if one remains in the same tax bracket after retirement.

I think everyone can claim to be "right" here. In the case mentioned above of someone remaining in the same tax bracket after retirement before considering their IRA (or 401k or 403b), then certainly one could claim to be "right" that the IRA income will be taxed at the marginal tax rate. One could also consider that the IRA income makes up the "first" portion of a person's income and that it is the other income that gets taxed at the marginal rate and be equally "right".

It seems to come down to each individual situation. I would guess that more often than not the IRA (or 401k/403b) income will make up the lion's share of someone's post-retirement income--I certainly expect it will in my own case unless I win the lottery! In that case, the "average" tax rate calculation becomes relevant and to my view the "right" way of looking at it. And if it turns out that I do remain in the same tax bracket after retirement without considering my 403b income, then I'll be way ahead of the game and I won't be complaining! :)

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