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Taxable vs. tax-advantaged: what is deferral actually worth?

The same dollars, the same return — taxed every April versus taxed once at the end. Watch what the difference compounds into.

Your inputs

Starting balance (after-tax dollars)

Annual savings amount

Annual increase in contributions

Years to grow

Expected return (before tax)

7.0%

Marginal tax bracket

24%

Compounding & savings frequency

Taxed every year

$—

after-tax value at year 20

Tax-deferred

$—

after paying tax on gains at withdrawal

$—the deferral advantage — same dollars, same return, different tax timing

Account growth: taxed annually vs. tax-deferred

Tax-deferred balance Tax-deferred after tax due Taxable account (taxed each year)

Deferral is one lever. Location, conversion, and timing are the others.

Which accounts to fill first, when Roth beats deferred, how withdrawals get sequenced — the full tax picture is bigger than any single calculator. We map it for you, for free.

Map My Tax Strategy

HOW IT WORKS & IMPORTANT INFORMATION: Both scenarios invest identical after-tax dollars at the same before-tax return. In the taxable scenario, growth is taxed at your marginal rate every year, so the balance compounds at a reduced after-tax rate. In the tax-deferred scenario, the full return compounds untouched, and tax is applied once — to the accumulated earnings, at your marginal rate — when the money comes out. This simplified educational comparison assumes a constant return and constant tax rate, treats all annual growth as taxed at your marginal rate (actual taxable-account outcomes vary with the mix of interest, dividends, and realized capital gains), ignores early-withdrawal penalties, required minimum distributions, contribution limits, and state taxes, and is not financial, legal, or tax advice or a projection of any actual investment. Tax-advantaged accounts have eligibility rules and restrictions; consult a qualified professional about your situation. Mountain View Wealth Management, LLC · 2611 S Clark St., Suite 600, Arlington, VA 22202 · (571) 368-6178. © 2026.