Traditional and Roth IRAs shield your growth from taxes. A regular brokerage account doesn't — every gain gets taxed along the way. Run your numbers and see which of the three actually puts the most after-tax dollars in your pocket at retirement.
All three accounts get the same annual dollar contribution. Traditional and Roth compound at your expected return. The taxable brokerage compounds at an effective after-tax yield of return × (1 − marginal rate) — a simplification of ongoing taxes on dividends and realized gains.
At retirement, Traditional is taxed at your estimated retirement rate, then the cumulative tax savings you pocketed from each year's deduction are added back uncompounded (matching the original FinMango model). Roth withdraws tax-free. Brokerage keeps what it has.
Your marginal rate is auto-detected from 2026 IRS brackets. Your retirement rate is estimated as your current marginal rate minus 2 percentage points — a common rule of thumb, but not a prediction. Income grows 3% per year; once it crosses the 2026 Roth MAGI phase-out ($153K–$168K single / HoH, $242K–$252K joint), Roth contributions phase down proportionally while Traditional and Brokerage keep going. The model assumes constant contribution limits and doesn't model state tax, ACA subsidies, or required minimum distributions on Traditional at age 73.
Both IRAs let your money grow without paying tax on the gains every year. A regular brokerage doesn't — and that drag compounds against you for decades.
Contribute pre-tax dollars and lower this year's tax bill. The money grows untouched by the IRS for decades — but every dollar you withdraw in retirement is taxed as income.
Contribute money you've already paid taxes on. It grows tax-free, and every dollar you withdraw in retirement — including decades of investment gains — is yours, untouched by the IRS.
A regular brokerage account (Fidelity, Vanguard, Schwab, Robinhood) has no income limits, no contribution limits, and no withdrawal restrictions — but the IRS taxes your dividends every year and your capital gains every time you sell. Over 30+ years, that drag typically costs you tens of thousands compared to an IRA.
You're in a low bracket today and your income (and tax rate) will probably climb. Locking in today's lower rate is a steal.
You're in a high bracket now and expect to spend less in retirement. The deduction today is worth more than the future tax bill.
National debt, demographics — there's a reasonable case future rates climb. Roth locks in today's rate and never owes more.