eight thousand a year, how much of your two-thousand-dollar IRA contribution could you deduct?"
"Well," I hazarded, "that's eight thousand above the IRA threshold for couples . . . ten percent reduction per thousand . . . leaves twenty percent... of my maximum two thousand contribution . . . I could deduct only four hundred dollars. And since Sue isn't covered by any plan right now, she could deduct the entire amount, since our income isn't over one hundred and fifty thousand."
"For now, yes. But when she sets up a Keogh plan, which I'll discuss in a minute, she'll be covered by a re-tirement plan and subject to the same rules as you. Tom, you try one. Let's say—"
"Thanks anyway, Roy. I think I've got it," Tom said disdainfully.
"So, Roy, should I contribute two thousand dollars knowing only four hundred will be deductible?" I pressed on eagerly.
"That depends on whether, after evaluating your other alternatives, your IRA contribution represents your best choice—"
"That is, your least painful choice," I stopped Roy.
"You're catching on, Dave . .. slowly, mind you, but you're catching on. I'll talk more later about the advantages and disadvantages of non-deductible contributions, including the Roth IRAs that are not deductible up front, but offer tax-free withdrawals down the road."
"Roy, the contributions I've made have been fully de-ductible because I'm not a participant in any other type of retirement program. I'm thinking of taking a year off sometime fairly soon to travel. Wouldn't it make sense to cash out my IRA at that time because I'll be in a lower tax