my problem states comparing taxable savings accounts to non-taxable IRAs with pre and post tax investment. Suppose at age 25 you earn $100 and are in a 30% tax bracket, how much will you have left after taxes? Now take that post tax money and put it in a savings account earning 8%/year interest. Your gain gets taxed at the end of every year. Assume that you leave everything in the savings account (except the amount you owe in taxes) so interest is in effect compounded yearly. What is the effective interest rate that you are earning each year after taxes?