Message Font: Serif | Sans-Serif

No. of Recommendations: 0
bartsd,

Something I do not understand in your post is the return you calculated.

\$22K at 5.5% for 20 years will become \$58K, not \$28.

`  Prin      Growth \$22,000.00 \$1,100.00  \$23,100.00 \$1,155.00  \$24,255.00 \$1,212.75  \$25,467.75 \$1,273.39  \$26,741.14 \$1,337.06  \$28,078.19 \$1,403.91  \$29,482.10 \$1,474.11  \$30,956.21 \$1,547.81  \$32,504.02 \$1,625.20  \$34,129.22 \$1,706.46  \$35,835.68 \$1,791.78  \$37,627.47 \$1,881.37  \$39,508.84 \$1,975.44  \$41,484.28 \$2,074.21  \$43,558.50 \$2,177.92  \$45,736.42 \$2,286.82  \$48,023.24 \$2,401.16  \$50,424.40 \$2,521.22  \$52,945.62 \$2,647.28  \$55,592.90 \$2,779.65  \$58,372.55 \$2,918.63`

If you have income that satisfies the requirements for a traditional or Roth IRA, you can do that.

If you currently have no traditional IRAs and you are not eligible for a Roth contribution, you can make a non-deductible contribution to a trad IRA. Once it is there and booked, to a Roth conversion of the entire amount. You will need to pay income tax on any growth that occurs in the trad IRA, a couple dollars at most. The advantage to a Roth is huge later on when RMDs kick in at 70 1/2 for traditional IRAs.

Google "IRS Pub 590" for the regs on IRAs.

Gene

### Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.