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Author: Crosenfield 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 75340  
Subject: Re: Which IRA? Date: 9/5/2000 4:04 PM
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"I can afford approximately $200/month.

- Do I start a normal or Roth IRA?"

Yes.
Which? Depends on your view of your tax bracket in retirement and what you will put your investment funds into.
Assuming at 43 you look forward to a long healthy life (still have healthy parents, right?) and you expect to make enough during your working life that you will in retirement still be in a tax bracket similar to the present one, the case for the Roth is quite compelling. To be eligible for a Roth if you are married, you can't have an adjusted gross income of over $150000.
If you aren't eligible for a Roth, get a traditional.
With a Roth, you pay the taxes up front but must never pay tax on the earnings. With a traditional, you may also not be able to deduct the contribution, but at least the earnings are tax-deferred.
With a long time span for your investment, you can afford to be fairly aggressive, but not a wildman. Selected stocks would be appropriate. Remember that if you don't make money on the Roth, it is contribution that you already paid tax on, so Uncle is less your partner. With the traditional, if you make a bunch, Uncle will collect tax on the gains when you take the money out. With the Roth, you paid on contributions and assuming you leave your money in place for the term, if you make 100X your investment in Capital gains, Uncle gets no more.
If you are going to invest in money markets or bank
CDs, you might as well stick with the traditional and defer the taxes.
Best wishes, Chris
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