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<<This is my first year in the job and I am not eligible for company sponosored pension plan.
Can I start an IRA this year for me and wife (not working) ?>>

Yup. If you (or your wife) are not covered by a qualified pension or profit sharing plan, you can put up to $2,000 away in a regular IRA and take a tax deduction. If either of you ARE covered by a qualified pension or profit sharing plan, then the rules get a little more complicated.

<< when in 1998 I become elgible and start putting money in the company sponsored pension plan,
what will happen to this account.>>

You'll have a number of options...

...you can simply leave the accounts where they are, and not add to them, or

...you can continue to make either deductible or non-deductible contributions to them in future years; or

...you can roll them over into a new Roth IRA.

For additional information on regular IRAs and how they work, check out the IRS web site at: http://www.irs.ustreas.gov, and read/download IRS Publication 590 regarding the basics of IRAs.

TMF Taxes
Roy
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