zlacker

>A wealthy person making 200k a year could contribute 100k to their 401k and more than halve their total income tax paid.

They'll pay it when they take it back out. At best they're saving the difference between the bracket rates in exchange for letting your money slosh around the markets for your working life.

>>potato+(OP)
401k is taxed at the time of withdrawal, but that's usually at a lower tax bracket.

500k in income 1 year is ~$162k in income tax.

500k in income split across 2 years is $68.5k each year totalling $137k.

It's not massive but it's still a decent chunk of taxes people can avoid.