The only thing your really missing out on is the tax benefit. [/quote]
Head bang wall.
He’s stated that his MAGI is too high for Roth. So their MAGI is north of $194K for a couple.
As such, his marginal tax bracket is 9.3% if not 10.3% in California and another 28% for Federal.
Combined a 37% tax hit. So to park that $18K max 401K contribution in a regular brokerage, he’s going to have to allocate $28.5K to pay the $10K+ in taxes and put the $18K in the brokerage. Any realized additional income or gains during the year are also taxed.
Last I checked, a 58% one year return with virtually zero risk was pretty good.
