You sort of neglected the tax incentive which is why they are so attractive. The Roth IRA is the most attractive of all. How is your savings account doing?
My trading account is doing well. Thanks for asking.
And the tax incentives in a traditional IRA is? Paying more later doesn’t sound like a deal to me.
My marginal federal rate today is 33% and my marginal state rate is 6% meaning I can put $9,016 into a 401k and/or IRA for the same $5,500 out of pocket into a Roth IRA (9k * (1-.39) = $5,500). If you grow $9k at 6% for 40 years, you'll have $92.5k. If your marginal fed bracket in retirement is 15% (high as most people get) and you move to a state like FL with no state income tax, your net after taxes on that $92.5k is $78.7k. Meanwhile, if you get 6% on that 5,500 for a Roth for 40 years you have $56.6k, ergo you end up with 39% more with a 401k contribution than a Roth net of taxes.