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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120780  
Subject: Re: IRAs and retirement Date: 12/8/1998 10:21 AM
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[[My wife doesn't work and I earn about $55K before taxes. I am not eligable for employer
sponsored retirement contributions until next year as I just started working at my current employer.
I have contributed $2K to an IRA for me and for my wife for this tax year. I have other money to
invest for retirement and graduate school but didn't know if there were any other possibilities of
doing so in a tax sheltered way or if the $4K traditional IRA were it. Is a Roth an option? I
understood that those were not a possibility if you have a traditional IRA.]]

I'm not sure that I really understand your question.

Remember that a regular IRA may shelter current income (in the form of a deduction), and will defer future income...but that future income will be subject to tax.
On the other hand, the Roth IRA will not shelter current income (since there is no deduction attached to it), but will shelter future income (in the form of tax free distributions if the rules are met).

You can read more about the deductibility of regular IRAs in the Taxes FAQ area. You can also read more about the Roth IRA in the Taxes FAQ area. Look for both posts in the (archives) section.

If I'm missing the point of your post, please try to narrow down the issues and give it to me again (after reading my posts in the Taxes FAQ area). I'll then try to provide you with a more specific answer.

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