Date: Fri, 14 May 2004 11:59:05 CST
From: "Ed Zollars, CPA" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Roth or Tradition IRA?
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Ron Peterson wrote:

> When a person is starting out, the tax deduction is crucial. If the tax
> deduction is present, it indicates a person doesn't have a real high
> income. 

Not necessarily--you can have $1,000,000 in income and be eligible 
to make a deductible IRA contribution.  The real issue is whether 
you are considered a participant in an employer sponsored retirement 
plan.

Now, while that might be true of the majority of high income 
taxpayers, it's not true of all.  There are various reasons why 
someone with a high income might not be a participant in an employer 
sponsored retirement plan--even if they control that employer 
(coverage cost for the rank and file is too high, and rank and file 
deferrals into a 401(k) are so low without a safe harbor plan that 
the owner's deferrals would not be enough to justify moving away 
from just an IRA).

--
Ed Zollars, CPA
Phoenix, Arizona