I'm still unclear as to my main question here. ... Won't I incurr taxes somewhere along the line here. Pre-tax 401K to traditional IRA to ROTH IRA doesn't seem correct in leiu of the tax issue. Are you neglecting to mention that I need to pay taxes each year on the ROTH? Sorry for confusion....if you could clarify...Thanks.

Yes, you WILL incur a tax liability with the traditional-to-Roth IRA conversion .. however, it's a ONE-TIME liability, which is an extremely important point!! Upon conversion to the Roth, the money becomes taxable income. But after you've paid the Piper (Uncle Sammie) that one time, from that point on your investment along with the dividends it earns are tax-free!! (keep in mind that there are certain requirements as to length of time the money must remain in the Roth, etc.) The MOST IMPT point here is that if you leave the money invested in the Roth until retirement, and it FOOLISHLY grows like gangbusters, you won't pay any tax on it when you begin taking your distributions at retirement!!! THAT, my dear Foolish Friend, is the absolute beauty of a Roth IRA!!! :))) I, for one, don't have a problem w/ not being able to write-off the $2k/yr I'll invest in a Roth in order to enjoy tax-free distributions that have grown immensely by the time I retire (I'm a mere 36yo right now, so I've a good 25yrs for my investment to grow, Grow, GROW!!!!!
fOoL oN!!
:) David