Valuing Assets in Retirement Saving Accounts

This document is about analyzing the differences in the value of assets held inside tax-deferred retirement accounts, such as 401(k) plans, and assets held outside these accounts. It discusses how factors like deferred taxes, tax-free compound returns, and investment horizons can make a dollar held inside a retirement account more or less valuable than a dollar held in a taxable account. The author presents calculations to illustrate these differences for bond and equity investments, and uses data from the Survey of Consumer Finances to estimate the weighted average relative value of tax-deferred assets for U.S. households.