I'm sorry, but you have it exactly backwards. Tax-deferred accounts don't rob you of the capital gains treatment of stock investments. They let you get away without paying capital gains tax on the gains at all. The income tax has nothing to do with that -- whether you use taxable account or a tax-deferred account, you are eventually paying the income tax, and that will be the same fraction of the account whether you do it on the front end or the back (assuming your tax bracket stays the same before and after, of course). Only the tax-deferred account lets you avoid the capital gains tax, though.Diligent savers can often accumulate higher after-tax level of assets by avoiding tax favored accounts (except for Roth). Tax deferred accounts rob you of the capital gains tax treatment of stock investments since all the gains get taxed as regular income. And taxable accounts don't have RMD issues. However few people will have the discipline to grow and maintain sizeable taxable accounts. Just about everyone succumbs to the siren call of "save money on taxes" by contributing to tax-deferred retirement accounts.
Statistics: Posted by MoreTaxes — Fri Jun 07, 2024 1:40 am