Where you hold an asset changes what it's worth
The same investment, earning the same return, ends up worth different amounts depending on whether it sits in a taxable brokerage account, a traditional 401(k)/IRA, or a Roth. Assets that pay out a lot along the way (bonds, high-dividend stocks) are usually worse off in a taxable account than low-dividend growth stocks are.
The comparison
One asset, one return assumption, three account types. Drag anything below and watch which account type comes out ahead.
The same $20,000, earning the same 7% a year with a 2% dividend yield, held for 30 years in three different account types — after all taxes are paid.
Ignores contribution limits, early-withdrawal penalties, and RMDs — this compares where to hold an asset, not the full rules of each account type (spec §3.2).
What the model does and doesn't account for
It taxes a taxable account's dividend yield annually at the long-term capital-gains rate and its appreciation once, at sale; it taxes a traditional account's entire balance at the ordinary rate on withdrawal; a Roth is never taxed. It ignores contribution limits, early-withdrawal penalties, and required minimum distributions — this is about where an asset is best held, not a full account-rules reference. See the About & methodology page for more on how these lessons are built.