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3) I agree that money in a Roth IRA is much better than then same amount in a traditional IRA but if I read you post correctly you can't currently afford to max out the IRA's. So the choice is more like either $3000 in a Roth or approximately $4000 in a traditional IRAs to be the same after taxes in this tax year.The additional money in the traditional IRA tends to lessen the advantage of the Roth IRA.

I'm a little confused by this argument, Greg. What additional money are you referring to? AFAIK, we are currently limited to $3,000 total, whether you pay taxes now or later.

The traditional IRA $4000 figure came from assuming that the marginal tax rate was something like 25% so that contribution to the TIRA instead of the Roth would result in about a $1000 tax savings, which would have the same net after-tax effect(in the current year) as a $3000 Roth contribution.

It is true that there is a $3000 limit per person but since they are a married couple, they can each contribute up to $3000 for a total maximum of $6000 dollars. If they wanted to contribute a total of $4000 this year they could contribute $2000 to each of their accounts. Starting a few years ago, even if one of the spouses is not working they can still both make IRA contributions.

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