‘Pay taxes on the seed, not on the harvest.’ This is an age-old saying that seems lost on Wall Street. But even so, is there a huge advantage to saving your money pre-tax? The answer might surprise you.
Did you know there is absolutely no difference between money saved with pre-tax dollars versus money saved after it has been taxed? Don’t believe me, check out the chart below and test it yourself with your own numbers.
In fairness, to say there is absolutely zero difference between pre-tax savings and post-tax savings is not 100% accurate. When you save pre-tax, you will be taxed at a rate determined in the future. So, if you are convinced that future tax rates will be lower than today, keep putting money in that 401k and cross your fingers.
If you are scratching your head or thinking ‘Why is this the first time I’ve heard this?‘ or perhaps ‘How can I get retirement money tax-free?’, maybe it is time to take a look at the Fortune Builder Wealth Plan. Fill out the form on this page and we will share the answers we’ve discovered.
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