I have funds sitting in a money market getting 5%/yr . If I am
correct, in 2008, any money in a tax deferred IRA can be converted to
a Roth in 2008. I am eying the possibility of starting a non-
deductible IRA, putting the funds in a money market and in 2008
convert to a ROTH and pay the taxes on the interest gains that the
money market accrued. Am I missing anything other than the
restricted access to the money in event of emergency? To me, this
seems like a great way to move money that sits in taxed money market
and put it in a tax-free vehicle to use for Roth account equity
investments later on. I am contributing fully to my IRA per annum and
my 401K, but that is not enough I think. I do not need the money now,
and feel that in my retirement years, the cost of things will be much
higher than now, hence the idea of having a tax-free account to pay
for things. Of course, watch and see a consumption tax replace an
income tax in later decades, lol.

I am eying the possibility of starting a non-
deductible IRA, putting the funds in a money market and in 2008
convert to a ROTH and pay the taxes on the interest gains that the
money market accrued. Am I missing anything other than the
restricted access to the money in event of emergency? [...]
I am contributing fully to my IRA per annum and
my 401K, but that is not enough I think.

I have funds sitting in a money market getting 5%/yr . If I am
correct, in 2008, any money in a tax deferred IRA can be converted to
a Roth in 2008.

If you are already fully funding an IRA (either a Roth IRA or
traditional deductible IRA), you can't sock even more money away in a
nondeductible IRA as well.

You need to read IRS publication 590 to read about the different kinds
of accounts and the contribution limits.http://www.irs.gov/publications/p590/index.html

-Sandra the cynic

On Jul 14, 1:52 pm, Sandra Loosemore <san...@frogsonice.com> wrote:

If you are already fully funding an IRA (either a Roth IRA or
traditional deductible IRA), you can't sock even more money away in a
nondeductible IRA as well.

You need to read IRS publication 590 to read about the different kinds
of accounts and the contribution
limits.http://www.irs.gov/publications/p590/index.html

-Sandra the cynic


You are correct. Somehow I got it into my brain that I had a free
lunch with a non-deductible IRA. It would be nice to have a means to
shelter more than just $4000/yr and 401K contributions. Am I out of
line thinking that the government is screwing the US citizen over for
not allowing them to expand their retirement nest egg as they see fit?
I am seriously concerned about inflation, especially in the health
care sector. If I am still around in 30 years, I think we will have a
huge demand for taking care of the elderly and how do you suppose that
will happen?

You are correct. Somehow I got it into my brain that I had a free
lunch with a non-deductible IRA. It would be nice to have a means to
shelter more than just $4000/yr and 401K contributions. Am I out of
line thinking that the government is screwing the US citizen over for
not allowing them to expand their retirement nest egg as they see fit?

I don't think it's fair that someone with a 401k gets to salt away far more
than someone with an IRA.
Maximum IRA contribution: $4,000 or $5,000 if over 50.
Maximum 401k contribution: $15,500 or $20,500 if over 50.
I guess you could buy a no-load annuity from Fidelity. T. Rowe Price, or
Vanguard.

On Jul 14, 1:52 pm, Sandra Loosemore <san...@frogsonice.com> wrote:

If you are already fully funding an IRA (either a Roth IRA or
traditional deductible IRA), you can't sock even more money away in a
nondeductible IRA as well.

You need to read IRS publication 590 to read about the different kinds
of accounts and the contribution
limits.http://www.irs.gov/publications/p590/index.html

-Sandra the cynic


You are correct. Somehow I got it into my brain that I had a free
lunch with a non-deductible IRA. It would be nice to have a means to
shelter more than just $4000/yr and 401K contributions. Am I out of
line thinking that the government is screwing the US citizen over for
not allowing them to expand their retirement nest egg as they see fit?
I am seriously concerned about inflation, especially in the health
care sector. If I am still around in 30 years, I think we will have a
huge demand for taking care of the elderly and how do you suppose that
will happen?

You are correct. Somehow I got it into my brain that I had a free
lunch with a non-deductible IRA. It would be nice to have a means to
shelter more than just $4000/yr and 401K contributions.