The Taxation of Retirement Saving: Choosing Between Front-Loaded and Back-Loaded Options

Leonard E. Burman William G. Gale David Weiner ABSTRACT We examine retirement savers’ choices between front- and back-loaded tax incentives, such as traditional and Roth IRAs, respectively. With equal dollar contribution limits, back­ loaded plans shelter more funds than front-loaded plans. This implies that Roth IRAs can be the preferred choice even for investors who expect their tax rates to fall in retirement. Empirically, we examine how marginal tax rates…