Reread the Calculations section of the wiki entry until it clicks for you.I have a degree in finance. I still don't get it.
https://www.bogleheads.org/wiki/Traditional_versus_Roth
Most people make the opposite, but equally incorrect, assumption to the one that you're making. Those folks mistakenly believe that by paying the 2k in taxes earler, they will lose all the growth they would have made if they had kept that tax money invested in their tIRA until some date in the future. They are wrong and you are wrong.
Commutative property of multiplication: if the marginal withdrawal tax rate on tIRA in the future is the same as the marginal tax rate paid for the Roth conversion in the past, then it's six of one and half a dozen of the other.
Statistics: Posted by Rocinante Rider — Fri Jan 10, 2025 5:15 pm — Replies 16 — Views 738