I largely agree with all the points made here however I think the overall message is a bit misleading. I would disagree that Roth investments are the preferred for long term investments. You aren’t accounting for the opportunity cost of the taxes paid in the initial investment year. Those taxes, while small compared to what you will withdraw tax free are also losing out on 8x-ing themselves (as you would have invested that amount in a traditional tax advantaged account).
What this means is Roth is the preferable savings method if you are in a lower marginal tax rate than you expect to be in retirement. However traditional is better if you are in a higher marginal rate than you expect to be in retirement. If the marginal tax rate was the same when you invest and retire then the difference between Roth and traditional would be nil.
I largely agree with all the points made here however I think the overall message is a bit misleading. I would disagree that Roth investments are the preferred for long term investments. You aren’t accounting for the opportunity cost of the taxes paid in the initial investment year. Those taxes, while small compared to what you will withdraw tax free are also losing out on 8x-ing themselves (as you would have invested that amount in a traditional tax advantaged account).
What this means is Roth is the preferable savings method if you are in a lower marginal tax rate than you expect to be in retirement. However traditional is better if you are in a higher marginal rate than you expect to be in retirement. If the marginal tax rate was the same when you invest and retire then the difference between Roth and traditional would be nil.