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Lots of advice back and forth. I hope I don't add to the noise.

Non-deductible IRA: Don't do it. Any money that comes out of it will be taxed as income -- and your income taxes are not going to get lower.

You state you are concerned with taxes, well then a tax-advantaged or even a normal stock mutual fund would likely serve you best. Congress just passed an extension to the 15% rate for LTCG and divs to 2010. There is a good chance that it will eventually be perm. You probably will never get close to a 15% tax rate on any of the money in your 401k, or what you would put on an IRA.

I am in a similiar boat, I want to retire prior to SS kicking in and I do a taxable brokerage account because I don't want so much of my money in an account that will be subject to income taxes in the future.

Imagine if at retirement, your state and federal income taxes are 65%, think you still have enough money saved to retire if you were banking on a tax rate of just 45%?
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