Pay the IRS now or pay them later. It is a fair question when weighing pre-tax versus taking your paycheck home in full. Craig explains the part of the equation that often gets missed: deferring into a pre-tax 401k lets the entire dollar amount, including the portion that would have gone to taxes, compound together. He calls it playing with house money, and explains why compounding on a larger pool of dollars creates dramatically more growth over time than compounding on a smaller one.
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