For decades, employer-sponsored savings plans were of the pre-tax variety. It was the only game in town. Employees were led to believe they would be in a lower tax bracket during retirement, so it made no sense to pay tax on the contribution while working.
Evidently, taxable withdrawals during retirement were not factored into the analysis. If it was part of the equation, we would have had the choice, decades ago, of making after-tax contributions to employment-based retirement plans.
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