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Tax Arbitrage and the Choice Between Roth and Traditional Retirement Accounts
The chapter explains the concept of tax arbitrage and its impact on the decision to choose between Roth and traditional retirement accounts. It compares contributing pre-tax money to a traditional account versus post-tax money to a Roth account, emphasizing considerations like future tax rates. They discuss various scenarios and strategies, highlighting the importance of understanding tax implications and considering factors like tax rate changes, deductions, and financial variables in making informed financial decisions.