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401K Or Non-401K Investment Calculator

3/9/2014

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You might wonder - if I keep on maximizing my 401K savings, when I retire, my income tax rate actually may be pretty high. Why not just putting money in the individual brokerage account and pay the long term capital gain tax rate which is only 15% for most people, even though 401K contributions enjoy tax benefits upfront?

You can use the following 401K or Not calculator to evaluate the two options - this calculator considers the following factors:
  • Your planned investment amount today
  • Your expected average annual return (historically average annual return is around 5-8%)
  • Your current income tax rate (remember, 401K has upfront tax benefit)
  • Your future income tax rate (you need to make some predictions)
  • Your capital gain tax rate (it really depends on your income level, for most people, 15%)
  • Your time horizon

Just fill in the yellow cells with your own numbers and see which option is better off for you.
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