No. of Recommendations: 1
You have it correct.
If this year you are eligible to contribute to a Roth and next year you cannot, then you do best to make that rollover to a Roth this year. Next year you will not be able to add to your Roth, but you can keep it as long as you like. Next year you can start a new, traditional IRA, which will be non-deductible if you are covered by a retirement plan at work.
You are going to invest, presumably fairly aggressively since you have a long time frame until retirement. In a Roth IRA you will pay no taxes when you take the money out. You will pay taxes on the money going in, at your 2005 relatively lower tax rate.
Assuming your high earning, and therefore high tax, years lie ahead of you, to convert immediately to an IRA seems to me to be a no-brainer.
Good Luck!
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