Tax Buckets Comparison
A neutral, educational comparison of how the same pre-tax dollars might grow in a Traditional (tax-deferred), Roth (tax-free growth), and ordinary taxable account.
Simplified illustration: the taxable bucket taxes only total growth once at the end, as a stand-in for capital-gains/dividend taxation — it does not model annual tax drag. This is not individualized tax advice; consult a tax professional for your situation.
$
%
%
%
Traditional (after-tax value)
$296,006
Roth (after-tax value)
$296,006
Taxable account (after-tax value)
$256,624
Key insight: when your tax rate is the same now and in retirement, Traditional and Roth produce the same after-tax result mathematically. If you expect a lower tax rate in retirement, Traditional accounts may have an edge; if you expect a higher rate, Roth may. Tax diversification — holding a mix — is itself an educational strategy worth understanding.
Sources & further reading