and under current law never will be (taxed).
“and under current law never will be (taxed).
I am willing to be corrected but that is a lie.”
I think at some of the lower income levels, that was the case for IRAs. But it doesn’t matter in the end, for the operative phrase is “current law”. They can change the law tomorrow.
It is not a lie. If you read the rest of the article, the author is referring to Roth IRA's and Roth 401(k)'s.
You pay income taxes on your contributions to Roth accounts, but you do not pay any taxes on withdrawals -- including any earnings and gains between contribution and withdrawal.
Taxes are paid at the time the money is withdrawn from the 401(k), which can happen without penalty after the age of 65. The theory has been that when a person is retired, he/she is automatically at a lower income tax bracket than when working and contributing. This has been the reason why it has been such an attractive way to save. In addition, many companies contribute to their employees’ accounts if an employee’s savings reaches a certain level.
"I am willing to be corrected but that is a lie."
You are correct. It is a lie.
Also, tax deferred retirement savings are subject to taxation when passed on to a non-spouse beneficiary in death.
In a Roth IRA, you are taxed on money you put in, but if the money you put in makes money, then that money is not taxed when you pull it out.
Ok, you earn 150 dollars, pay income tax, get 100 dollars and put it in a Roth. The 100 dollars invested in apple goes way up to 600 dollars. You get to withdraw 600 dollars tax free when you retire. Of course if you invested your roth in the old GM, and when it went to zero, you could not even use the 100 dollars loss as any kind of deduction or offset either.