If you are among those who are ineligible to contribute to Roth IRA, you might want to carefully consider the option of tax free portfolio growth that is enabled in the latest tax law revision. You can open an account of non-deduction traditional IRA and contribute up to $5,000 annually, and convert the non-deduction IRA to Roth IRA after 2010. This strategy will, of course, require multi-year and even multi-decade planning. I might have to reconsider my retirement savings strategy with this new option since I'm priced out of Roth IRA too.

Under current law, you can't contribute to a Roth if you are single and have an income of more than $110,000, or married with a joint income in excess of $160,000. The new law, which goes into effect in 2010, does not alter the income limits for Roth IRA contributions. But it does eliminate the $100,000 income limit for converting a traditional IRA to a Roth. You must pay income taxes at your top rate on the total amount you convert to a Roth -- that's the price you pay to make all withdrawals tax-free in retirement. To encourage conversions, which will bolster U.S. Treasury coffers in the short run and save you loads on taxes over time, Congress says that folks who convert in 2010 can spread the tab over 2011 and 2012.

By opening the back door to Roth conversions for everyone, Congress effectively wiped out the limit on pay-ins, too. And high-income taxpayers can waltz through the door right away. Starting in 2006, you can contribute $4,000 a year to a nondeductible traditional IRA, or $5,000 if you are 50 or older. (The limits rise to $5,000 and $6,000 in 2008.) In January 2010, when the income limits disappear, you can convert the traditional IRA to a Roth IRA and owe tax only on the earnings.