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I do not qaulify for the ROTH IRA. My question is if it is worth parking $2000 a year in a traditional IRA and loosing the flexibility to have access to this money if I need it in an emergency.

Before you start looking to invest in IRA's, it seems you may want to get an emergency fund set up first. Fools usually recommend anywhere from 3-6 months salary stashed away in a money market mutual fund or a CD. Once you have that amount setup and there for you if an emergency should occur, you'll be able to invest with money you won't need to get your hands on for atleast 5 years. Investing money should never be considered emergency money, because when you consider the volatile swings of the stock market, what you put in a stock, may not be there if you need it in 6 months. But cash in a money market mutual fund, while not guaranteed, (it's the next best thing), won't suffer the wild movements of stocks. And they're a safe bet you'll have available what you put in (while earning around 5%).

Last item to remember, these savings vehicles are IRA's - Individual Retirement Accounts. Let them serve their purpose, while the MM fund does its job as well, and you'll be laughing all the way to you vacation home in Belize (or at least to your award-winning garden in your back yard).


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