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"MADCOW"
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  • Joined Mar 2003
  • Posts 29234
  • EE 100% (144)
USA FL, USA
Posted: 6/28/2012 11:43:18 AM EST
Ive always been taught that its good do to the Pre-Tax 401k because it lowers your taxable income. Which is true. But lets look at this long term, unless Im missing something.

Ive got a friend whose father passed away recently, he had a Thrift Savings Plan which is basically a government 401k. He had contributed starting in 1967 til 2012 when he passed. Need-less-to-say it was worth a little bit of money. Once he passed away, because he didnt have a spouse all the money went to the kids. The TSP had to be cashed out completely, no roll over into any inherited IRAs or anything, it had to be cashed out. Well, the government now wants the taxes on the WHOLE amount.

So, my thinking is this. Money from 1967 thru 2012 was taxed completely on 2012 rates which Im sure is alot higher now than in 1960s-1970s etc. . Wouldnt it been better to pay the taxes as it went along alas Post-Tax TSP/401k?

OR

Does it all wash out in the end regardless?
There is no level playing field in life ~ Para069

Heh, heh. You said member
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  • Joined Mar 2006
  • Posts 1208
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USA UT, USA
Link Posted: 6/28/2012 1:29:37 PM EST
Puritanism: The haunting fear that someone, somewhere, may be happy.

-Mencken
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