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I need some help in deciding whether to invest in a 401k or an IRA for the tax year 1999.

I have a 401k plan at my organisation but i never participated in it as the company was not making any contributuion to it. But now i feel i should have a tax-deferred plan and i'm not able to decide between the two. Can i open a IRA account now and then participate in a 401k sometime next year ? I understand that for a salary >$50k, there will not be any IRA deduction if one is covered by a retirement plan like 401k and I fall into this salary bracket. How should I go about investing if i need the maximum possible tax deferment. Please clarify.

Thanks in adavnce
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