What about if I’m not eligible for a tax deduction in a traditional IRA but I am eligible for a Roth IRA?

If your income is too high to deduct a traditional IRA contribution, but not so high as to disqualify you for a Roth IRA, then the Roth IRA would be superior to investing in a nondeductible traditional IRA. In both cases you would be investing with after-tax money. But the earnings in a Roth IRA would come out tax-free, so long as certain conditions are met, while earnings from a traditional IRA would be taxed on withdrawal. Also, with a Roth IRA there is no mandatory withdrawal schedule to worry about.


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