Your account details
Enter your current savings and how they are invested
Enter your account balance and how it is invested. We compare four account types — income taxable (annual tax on gains), growth brokerage (LTCG tax only at sale), tax-deferred (401k/IRA), and tax-favoured — so you can see exactly what each structure costs your family over time.
Current account balance
$
Annual contribution
$
Gross annual return
%
Your marginal tax rate
%
Long-term capital gains rate
Typically 15% or 20% for HNW clients
%
Years to grow
Your tax drag cost
Wealth transferred to the IRS over — years
from your taxable account alone
from your taxable account alone
$0
This is the difference between what your money earns and what you actually keep after taxes
"When you earn interest in a taxable account it leads to increasing tax — and the IRS becomes a silent partner in your growth."
How each account type grows your money over — years
Income Taxable
CD · Savings · Dividend stocks
Final balance
—
Tax paid annually
—
Net kept
—
Effective return
—
Every year your account earns interest or dividends, the IRS taxes it immediately — whether you withdraw the money or not. It is like having a silent partner who takes their cut before you ever see the growth.
The after-tax rate: 7% × (1 − 32%) = 4.76% effective rate Your money compounds at 4.76% instead of 7%. That 2.24% annual drag compounds against you every single year — silently, without ever sending a bill.
The after-tax rate: 7% × (1 − 32%) = 4.76% effective rate Your money compounds at 4.76% instead of 7%. That 2.24% annual drag compounds against you every single year — silently, without ever sending a bill.
Growth Brokerage
Index funds · Growth stocks
Final balance (pre-tax)
—
LTCG tax at sale (15%)
—
Net kept after sale
—
Effective return
—
A buy-and-hold growth account does not pay tax every year. The gains are unrealised — nothing is sold, nothing is taxed. The account grows at the full 7% rate with zero annual tax drag.
Tax is only triggered when you sell. And at that point you pay only the long-term capital gains rate on the gain — not the full balance.
At sale: Gain = final balance − cost basis → LTCG tax at 15% Why this beats income taxable: deferring the tax to the end and paying 15% LTCG instead of 32% ordinary income annually saves your family —.
Why it still loses to tax-favoured: even the 15% LTCG tax at sale costs — that the tax-favoured account never pays.
Tax is only triggered when you sell. And at that point you pay only the long-term capital gains rate on the gain — not the full balance.
At sale: Gain = final balance − cost basis → LTCG tax at 15% Why this beats income taxable: deferring the tax to the end and paying 15% LTCG instead of 32% ordinary income annually saves your family —.
Why it still loses to tax-favoured: even the 15% LTCG tax at sale costs — that the tax-favoured account never pays.
Tax-Deferred
401k · Traditional IRA
Final balance (pre-tax)
—
Tax at withdrawal
—
Net kept
—
Effective return
—
A 401k or IRA grows at the full 7% rate with no annual tax drag — better than income taxable. But this account does not eliminate tax. It postpones it.
Every single dollar you withdraw in retirement is taxed as ordinary income at your full marginal rate — regardless of how it grew or how long it was held. There is no LTCG treatment inside a 401k.
At withdrawal: Full balance × 32% = IRS share at withdrawal The IRS is a silent co-owner of — of your 401k balance right now. That money does not belong to your family — it belongs to the IRS and will be collected when you withdraw.
The postpone-tax risk: if tax rates rise between now and retirement, you will pay more than today's rate on every dollar withdrawn.
Every single dollar you withdraw in retirement is taxed as ordinary income at your full marginal rate — regardless of how it grew or how long it was held. There is no LTCG treatment inside a 401k.
At withdrawal: Full balance × 32% = IRS share at withdrawal The IRS is a silent co-owner of — of your 401k balance right now. That money does not belong to your family — it belongs to the IRS and will be collected when you withdraw.
The postpone-tax risk: if tax rates rise between now and retirement, you will pay more than today's rate on every dollar withdrawn.
Tax-Favoured
Roth · Tax-favoured strategy
Final balance
—
Tax on growth
—
Net kept
—
Effective return
—
A tax-favoured account is the only account where what your money earns is exactly what your family keeps. No annual tax drag. No withdrawal tax. No IRS co-ownership of the balance.
The account grows at the full 7% rate — the same as the 401k — but every single dollar is yours at the end. The effective return equals the gross return exactly.
Why it beats everything else: Effective return = Gross return = 7.00% — no leakage at any point The — advantage over the growth brokerage account comes entirely from eliminating the LTCG tax at sale. The — advantage over the 401k comes from eliminating the ordinary income tax at withdrawal.
The key question: does this account type apply to your specific income level and situation? That is the strategy conversation.
The account grows at the full 7% rate — the same as the 401k — but every single dollar is yours at the end. The effective return equals the gross return exactly.
Why it beats everything else: Effective return = Gross return = 7.00% — no leakage at any point The — advantage over the growth brokerage account comes entirely from eliminating the LTCG tax at sale. The — advantage over the 401k comes from eliminating the ordinary income tax at withdrawal.
The key question: does this account type apply to your specific income level and situation? That is the strategy conversation.
The difference between taxable and tax-favored
Enter your numbers above to see your personal comparison.