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The money in your 401(k) and IRA accounts doesn’t belong entirely to you

Alicia H. Munnell
The money in your 401(k) and IRA accounts doesn’t belong entirely to you

Of course, we have all benefited throughout the years by not having to pay taxes on contributions paid into our traditional 401(k) plans and IRA accounts and on the investment returns on those contributions. A little algebra reveals that the benefit is equal to exempting investment returns on plan assets from taxation. Rather, my concern is that people with moderate and higher incomes haven’t taken taxes into account in assessing how well prepared they are for retirement.