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OK, I've read all the postings that explain when you can no longer contribute to a Roth IRA. I understand the phase-out thing when you go over the AGI limit. But what happens when you've been contributing to a Roth IRA and your AGI then goes over the limit? And does AGI factor in the deduction for contributions to a 401(k) plan?

If you can't make any more contributions to a Roth IRA after that limit, what's the point of having it?

Real world for-instance... my wife (who's company STILL -- after a year of employment -- has not enrolled her in their 401(k) plan) is contributing to a Roth IRA and putting in the maximum of $2,000 per year. No problem, our AGI isn't yet anywhere near the maximum.

But I just got a new job with a hefty raise. I'll be contributing the maximum (15% pre-tax) to my new 401(k) plan (and rolling over my old 401(k) money into a traditional IRA that I'll manage myself, thank you very much ;-D). Going just on my new base salary and bonuses, plus my wife's salary, we'll probably hit that 150K limit within the next couple of years. Or will it take longer than that, because the 401(k) contributions will knock a few thousand each year off of my AGI?

What does my wife do when we hit the limit? She can't contribute to the Roth any more at that point, so it's just going to sit there. Can she convert it to a regular IRA so she can keep making contributions? Or does she simply have to "let it ride" and get by on whatever compounding will happen afterwards?

Thanks in advance for the help! :-)
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