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My AGI is currently above the phase-out threshold for single filers AND I'm covered by an employer-sponsored retirement plan at work. So, any contributions to an IRA would not be tax-deductible. At this point, I'm a little lost as to why someone in my position would *want* to invest in an IRA
(not a Roth).

What is the difference between putting my after-tax money into an IRA and putting the same money into any old mutual fund? The biggest difference I can see is that putting my money into an IRA ties it up until I turn 60. Are there any other differences? Is there some advantage to putting money into an IRA that I'm not seeing?

With either method, I'm still going to end-up paying taxes on the investment when I start making withdrawals, right?

I found this little blurb on the Vanguard web page:

"Note: Taxpayers ineligible for deductible traditional IRAs (or the new Roth IRAs) may continue to make nondeductible contributions of up to $2,000 per year to a traditional IRA. Doing so could still prove advantageous because of the tax-deferred growth of earnings until the money is withdrawn."

Huh? What is the "tax-deferred growth of earnings" that they're referring to?

Thanks. :^)

-Scott the Newbie
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