Government Qualified Plans

Tax the seed or the harvest?

If you were a farmer would you rather pay the tax on the seed, or on the harvest? Obviously the seed would have a much smaller tax proportionately. So why do we contribute to certain qualified plans?

The only way to win in any retirement account is to take the money out at a lower bracket than the one you contribute with. Do you think you will be in a lower tax bracket in the future? This is highly unlikely assuming the fact that you will hopefully only increase your income, and decrease your liabilities, but on top of that, for political reasons that just might not be possible for a very long time.

There are alternatives that are outside the control of the government that are much more attractive that will get your money out of the tax loop completely.