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Gary, you wrote:

Some more information on our situation. I have roughly 5K in a deductible traditional IRA. I believe my wife has about 3K in a deductible IRA. Her pension has not yet been put into any type of IRA. Last year we paid a federal income tax rate of 21.25% on our taxable income. We are planning on together putting $4K annually in our IRA's. I am 40, my wife is 37.

If it is not advisable to convert a deductible IRA into a ROTH, is it still advisable to open a new IRA as a ROTH?

Note that you have to do the analysis to see if the conversion to a Roth is to your benefit. Given your ages, in your case it might be the smart move. BUT - You have to run some numbers to be sure. As to a contributory Roth IRA, to me that's a no-brainer. A $2K after-tax deposit to a Roth IRA will beat a $2K deductible deposit to a traditional IRA every time. Yes, it costs extra up front due to the taxes, but that extra money compounds tax-free and can be taken out tax-free. That makes it all worthwhile over the long run.


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