No. of Recommendations: 1
We'd like to open an IRA. Now, I like the flexibility of the RIRA, and we more than qualify right now income-wise. BUT we're on a track where that will change sort of quickly (within 5 yrs) and we won't be eligible for too terribly long. I realize it makes sense to have both. Problem is, we can't afford to open both right now.

Your statements that you currently have low enough income to qualify for a Roth and that you can't afford to open both RIRA and TIRA right now--cause me to assume that you're not in a terribly high tax bracket, plus you don't live in NY, but Indiana, where I'm also assuming you don't pay high state and local taxes. These assumptions of mine lead me to believe that the advantages of the TIRA deductibility for you are not that great.

Plus you state that you're assuming/hoping your income will increase in a few short years and you'll no longer be eligible for a Roth. I am not eligible for a Roth because of my income--I WISH I was. I agree with all of Agg97's statements, particularly the part about flexibility, and would put the money in a Roth while you can. Even if your income doesn't rise enough that you become ineligible, in later years you could always go with the TIRA if you wanted to take advantage of the deduction as your income rises.

If, based on all the viewpoints you've heard, you're still torn between the two, you could always split the $3000 between a RIRA and a TIRA--$1500 in each. Vanguard will open either of these accounts with a $1000 minimum, but it may cost you a bit more in annual fees.

If I were in your shoes tho, I'd go with the Roth.

2old


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