Abstract
This article compares the after-tax returns for investors who maximize contributions in a Roth IRA versus investors who maximize contributions in a traditional IRA and, in addition, invest the annual tax savings generated from the traditional IRA deductible contributions into a separate taxable investment account. The results of this research study indicate that, when the investment parameters and marginal income tax brackets are similar, the Roth IRA investor can achieve higher after-tax returns over the traditional deductible IRA investor, even when the annual tax savings are invested by the traditional IRA investor.
Original language | American English |
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Journal | Journal of Financial Service Professionals |
Volume | 66 |
State | Published - Sep 2012 |
Disciplines
- Business Administration, Management, and Operations
- Finance and Financial Management
- Economics
- Finance