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All Fools please read what Joe wrote. This is good stuff!!!
>>>In any event, even if you're in the cutoff band, it makes sense to make the maiximum Roth contribution you can. Now, it's up to you whether funding a non-deductable Tradtional IRA is the right option afterwards. I'd go to a taxable account first with LTB&H to get better tax treatment (ie. long term capital gains rate is lower than your tax bracket). And there's no limit to how much you can dump into a taxable account.>>>
Unfortunately, I do not qualify to contribute to a Roth, but I do fully (Fooly?) appreciate their value. In fact, IMHO Roth IRA's are such a good deal that I believe the government will probably change the rule. Yes, it is a bit pessimistic, but probably accurate, unfortunately. IMHO, anyone who is eligible to contribute to a Roth and doesn't is just plain foolish (note lower case).
Just to add my two cents for LordHedgehog's benefit: 1)contribute to the 401k until the employer stops matching (like you said , "I can't help but think its a good idea to take advantage of the 'free money.'" , 2)then max out a Roth each year, 3) then Long term buy and hold to take advantage of long term capital gains rates versus income tax rates. It really is that simple and Foolish.
jeffy3

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