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My wife and I each have a traditional IRA which we haven't contributed anything to in 15 or 20 years.... we do have significant savings in tax deferred accounts through our employers, but no recent traditional IRA contributions....we quit contributing at the time because due to my income, I wasn't recienveing

I'm 56 and find myself with money I would like to invest tax deferred if possible.... as previously stated, I have a couple of traditional IRAs, but would like to contribute some amount to a 'new' traditional IRA.

Is it possible to set up another 'traditional' IRA for 2013 (have already finished my return) or should I wait or put the money in as a 2014 contribution?

And... how much can I contribute to this new Traditional IRA?

I want to keep things as simple as possible. I'm mainly interested in opening this new IRA to be able to put money somewhere that I can invest/trade in a tax deferred status....I'm not overly interested if it reduces my current tax situation (from what I remember, it didn't help me much 20 years ago, so I don't think it would help me now)

Any advice including telling me I don't have a clue what I'm doing will be most appreciated...

Many thanks...

Mick
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Maybe I've answered my own question.... then again maybe I'm just further off base....

Traditional IRA... I can open one and keep it until age 70.5.... with my income, none of it will be deductible (which is why I stopped using it 20 years ago), but that was expected..

Roth IRA.... never looked at them, but looks like the way to go.... my AGI is under the 167K married filing jointly, so even though I have a work sponsored retirement plan, it looks like I can open a roth, contribute to it with after tax dollars but allow them to grow tax deferred.... including when I take it out...

Have I totally confused the issue.....

Mick
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A Roth is the way I would go. You have until 4/15 to set up an account for 2013, and can contribute for 2014 as well as long as your 2014 income won't be too high. After 50 you can contribute up to $6,500 per year, and your wife can also open a spousal Roth IRA. If she is not yet 50 then her contribution would be $5,500 per year.

If you are not sure your 2014 income will be under the limits, then you can either wait until 2015 to make the contribution for 2014, or recharacterize the funds to a TIRA if you go over. We have no desire to put more in our TIRA so we are waiting until we are sure about income. For us the uncertainty is the year end bonus.

IP
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I'd go the Roth route if you can't deduct the contribution to a Traditional. Once you put after-tax money in a Traditional you have to follow the gov't formula to calculate how much of distributions are a reclaiming of that after-tax money. You get only a fraction each year and have to exhaust the account to reclaim all of it. It's just stupid but it's not a problem for enough people to ever get Congress to fix it.
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Once you put after-tax money in a Traditional you have to follow the gov't formula to calculate how much of distributions are a reclaiming of that after-tax money. You get only a fraction each year and have to exhaust the account to reclaim all of it. It's just stupid but it's not a problem for enough people to ever get Congress to fix it.

Why do you think it's stupid? I think it's quite sensible that if 5% of your TIRA consists of after-tax contributions, then 5% of a distribution is exempt from tax.
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