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* Assumes gains in taxable accounts are taxed at 32% per year for 20 years. Each $1.00 earns a 10% pretax return per year for 20 years and generates a $4.89 after-tax amount in a tax-deferred account and $3.23 in a taxable account. Therefore, wealth in a tax-deferred account is increased by roughly 31%.
** Notional investments do not reflect an interest in, or control over, real investments, but are used to determine the amount payable to the employee in the future.
1 Morgan Stanley. “2024 Nonqualified Deferred Compensation Survey”, December 2024.
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