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May 12, 2025

Why Pre-Tax Contributions Outmaneuver Roth in Peak Earning Years: Even with Rising Tax Rates

The Math Behind the Advantage For high earners in the 35-37% tax brackets, pre-tax contributions act as powerful accelerators of wealth accumulation. When you contribute $23,000 to a pre-tax 401(k), you immediately save $8,050 in taxes. This immediate tax relief isn’t just about saving money today-it’s about having more capital working for you over decades. Research from Bernstein highlights that...
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