Julian's annual contributions to his retirement are not tax-deductible, but his earnings accumulate tax-free. He is investing in a

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The tax-free accumulation of earnings is a unique feature of a Roth IRA. While contributions are made with after-tax dollars, individuals can withdraw the funds tax-free upon retirement age. This option may be more beneficial for Julian if he expects to be in a higher tax bracket at retirement age, as he will be able to withdraw without worrying about the tax implications. However, if Julian wants to reduce his current taxable income, he may want to consider the traditional IRA or 401(k) plan.

Julian's Annual Contributions to His Retirement Are Not Tax-Deductible, but His