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Can I ask a related follow up question?

DW and I each have 401k's only, and currently no IRAs of any type. DW recently switched jobs, and has a 401k ($70k or so) that could be rolled into an IRA, but we haven't done anything with it yet.

For 2009, both of us were covered by retirement plans at work. AGI for 2009 is ~$155k, MFJ.

For 2010, DW was covered by a retirement plan in January, but won't be for the rest of the year at the new job. I think that's a red herring, because for 2010, I expect our AGI to be above the $177k limit, so no Roth, and no deductible IRA would be available anyway.

To make up for DW not having a 401k this year, I'm looking for the best mechanism to set some additional money aside. It looks like 2009 is easy, because we're under the $166k AGI limit for Roth participation. We should just open accounts and each make a $5k contribution by April 15. For 2010, we'll be above the Roth limits, and would have to make non-deductible IRA contributions instead. If we DO NOT rollover DW's 401k, wouldn't it be trivial to convert those non-deductible contributions immediately into a Roth, with no tax consequence?

Just want to make sure I'm understanding all of this correctly.
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