Roth vs Non deductible traditional Ira

Roth withdrawals are tax-free, withdrawals from traditional IRAs are taxed based on the proportion of deductible to non-deductible contributions that were made to it (so if all the contributions to the regular IRA were non-deductible, then the withdrawals are also tax-free). If your MAGI is above a certain limit (I think it's $110K for individual filers) you are not eligible to make Roth contributions at all.

-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA

Incomplete. Earnings on a traditional IRA are taxable. The exclusion from income stops when the non-deducted (or post-tax) basis is depleted.

Well as a practical matter, it never is depleted unless you liquidate all IRA's. Otherwise, you only use a fraction of the remaining basis on any distribution.

-- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062

As the basis is prorated across the life of the expected return, true. However, remember that one can live longer than one's expectancy, so it is possible to deplete the basis before depleting the IRA in full. Remember Revenue Notice 88-118, which in a modified form, became the "general rule" used in the 1990's to amortize annunity payments? It's quite possible to live longer than the notice's periods.