Hate to nit pick but this is slightly wrong. A traditional account doesn't skip the first two and pay the third. It defers 1 and skips 2 and 3. You don't pay taxes on just gains you pay taxes as if the entire withdrawal was income, rather than a taxable where you only pay on gains.* Tax on normal income(i.e. from your paycheck)
* Tax on yield while holding the asset(dividends from stocks, coupons/yield from bonds).
* Tax from any gains when you sell/withdraw the asset.
A Roth retirement account avoids the last 2. A Traditional retirement account skips the first 2. A taxable brokerage account gets to pay all 3.
Statistics: Posted by cvoege — Tue Aug 27, 2024 7:32 pm — Replies 10 — Views 531