A 30-year-old software engineer earning $120,000 contributes $7,000 to a traditional IRA and invests it identically to her colleague who puts the same $7,000 into a Roth IRA. Both earn 9% annually for 35 years. At retirement the traditional IRA holds $151,820 — but she owes income tax on every dollar she withdraws.

In the 22% bracket, she keeps $118,420. The Roth IRA also holds $151,820 — and she keeps all of it. The $33,400 difference is entirely the consequence of one decision made once, in her thirties.

That decision — which account type to use — is the single highest-leverage tax choice most investors ever make. Every investment account in the U.S.

uses one of three tax treatments. Tax-deferred accounts give you a deduction now and tax you later. Tax-free accounts tax you now and never again.

Taxable accounts tax you continuously — on dividends when paid, on gains when realized.