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My salary phases me out of being able to contribute to a Roth IRA and I'm also phased out of any tax break from a traditional IRA.

Do you have other pre-tax IRAs in your name? If not, you could contribute to a non-deductible IRA and immediately convert to a Roth IRA, since there is no longer an income limit on conversions.

I know that the answer is really complicated and based on future tax rates as compared to current rates. I'm 45. I have about $250K in total in all my retirement accounts. I'm in a high tax bracket right now as my wife and I make more than $250K/yr combined.

My thoughts are to skip the tax break that I'd get by reducing my taxable income in the current year (i.e., favor the Roth 401(K)). I think this will give me a tax diversification strategy.


Are you planning on retiring before you have to start RMDs at 70 1/2? If so, are you going to have some lower income years to do conversions from pre-tax to Roth? You might want to take a tax break now, if you are going to be able to convert later at lower rates.

AJ
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