Quote:
Originally Posted by MonkeyMama
Yes, you can contribute to a Traditional IRA, without a deduction, like Steve said.
In 2010 there is a tax loophole where you can convert this into a ROTH, regardless of income. IF I were you I would contribute the max to regular IRAs through 2010. In 2010 you can convert it all to a ROTH and combine it with your ROTH. It will grow tax free to retirement (or until tax law change anyway).
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And if you do that Roth conversion in 2010, after 5 years the conversion amount (not the gains on the conversion, though) can be withdrawn EXEMPT from the normal 10% penalty for withdrawal of retirement funds before age 59.5.
That can give you one more potential cash stream (along with taxable accounts and penalized early withdrawal + taxes from traditional IRA) if you retire early. Of course, pulling money out of tax protected accounts has it's drawbacks, but depending on your total income in may have a place as one tool in your overall "living off your nest egg" strategy.
Lynda