If i were to save 18k a year for 5 years, that would be 90,000.

If I were to contribute 18k a year for 5 years to 401k, how much more would that be?

When you have 100$ in you pocket, you actually paid around 110$-125$ for it, depending how much get robbed from each paycheck.

When you invest in a trad 401k, the 100$ you wish to invest is removed, BEFORE you get robbed. So you actually end up with MORE money, take away the normal taxes.

Say you make 100$ in a paycheck and are taxed at 10%. That means you only take home 90$ and pay 10$ into taxes.

If you invest 10% into a trad 401k, your earned income is only 90$, which means that is taxed at 10% for total taxed amount of 9$, and your take home pay is 81$. and 10$ is saved.

So your takehome pay is 9$ less than normal, but you put 10$ into your 401k, thus a 1$ in tax savings, or 1$ more total to your net worth since it wasn't taken away from you.

The idea is when you retire early you keep your taxes low now, and when you pull your money out, you pull it out slowly enough there is little to no taxes.