If I were in the situation where I couldn't deduct traditional IRA contributions nor contribute to a Roth IRA, I would still consider non-deductable contributions to a traditional IRA but would probably consider only tax-inefficient investments in it, such as bonds or a bond fund or a REIT. I would use a taxable account for investments that are somewhat tax efficient (e.g., individual stocks, or stock funds that tend to have low turnover) and use the taxable account for investments that would eventually be taxed at long-term capital gains rates.I would hate to turn good long-term capital gains rates into ordinary income tax rates just by sheltering it in a non-deductable traditional IRA.IMHO, of course.
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