Hi friends. Thanks for downloading the Money Girl Podcast.

I'm Laura Adams, the author of an award-winning book called Money Girls Smart

Moves to Grow Rich. You'll find the paperback or e-book at your favorite bookseller.

I recently received a couple of related questions

about making contributions to multiple retirement accounts. Marta says, I max out my 401k

at work each year and still have more to invest.

If I contribute to a traditional IRA, I understand that I don't get a tax deduction.

But I can't contribute to a Roth IRA because I earn too much. What should I do?

And Arthur asks, I maxed out my 401k for 2012 and want to know if I can also max out an IRA? If so, would my IRA contributions

also be tax deductible? Both of these questions beg for an explanation of the rules and whether using a

non-deductable IRA is right for you. Okay, let's dig into retirement accounts.

Before we get too far, I want to make sure you understand the terms deductible and non-deductible.

Certain expenses like mortgage interest, charitable donations, and qualified retirement contributions

allow you to legally reduce your taxes

because in general they can be deducted from your taxable income.

It's always smart to reduce your taxable income because that cuts the amount

of tax you have to pay so you get to keep more of your hard-earned money.

So a tax deductible expense is one that has the potential to reduce your taxable income and save money,

but a non-deductable expense does not.

This distinction between deductible and non-deductible is important

when it comes to retirement accounts. Here's what you need to know. With a

traditional retirement account, you make contributions on a pre-tax basis,

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