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An After-Tax Roth IRA Has Its Advantages

By JOEL FRANK
Posted 7/26/21

For the Career Civil Servant (CSS), is it better to invest pre-tax or after-tax? Will the CSS be in a lower or higher income tax bracket during retirement compared to the tax bracket while working?

Let's take a look at Bob's situation. He is a Teacher and plans to retire at 65 after 40 years of service. He intends to contribute the maximum to the Deferred Compensation 457(b) Plan of the City of New York. He is looking forward to a taxable pension + taxable (85 percent) Social Security + taxable Required Minimum Distributions (RMDs) from his pre-tax 457(b) account.

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