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A followup question is whether I can convert back and forth between regular non-deductible IRA to Roth-IRA accounts as my AGI permits in a given year. By doing so:
a. Is there any advantage?
b. any loss in conversion
c. hastles in the process?

I think you may not have heard that once you open a particular type of IRA (deductible, non-deductible, Roth), you can keep that IRA going, regardless of your future income. For example, if you put money into a Roth last year, but this year your income is too high to put money into a Roth, you can still keep your old Roth in place. You just can't add more contributions to it during a year your income is over the limits. Same for deductible and non-deductible traditional IRA's. So anyone could have all three types in place at once. There is no requirement to convert existing funds from one type to another.

To answer your questions more directly: a) sometimes there is an advantage in converting a traditional IRA to a Roth. You'll have to run some numbers to see if it makes sense for you. You can recharacterize contributions from a Roth to a traditional, but once you are in a Roth for a tax year, you can't convert back. A traditional IRA can be converted to a Roth, with the appropriate tax payment. b) the only losses in conversion would be due to selling and purchasing of securities in the accounts. If you are staying with a particular broker for both accounts, selling and repurchasing should not be necessary. c) From what I hear, any hassles will be associated with your broker, not with the IRS. Clear communication with your broker is essential to minimize these.

Hope this helps.

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