Every year since 2009 I've contributed up to the max into an IRA (5K - 5.5K), but due to my income the entire contribution is non-deductible. I also have a rollover IRA. The rollover IRA has a balance of about 112K. The Non Deductible IRA is at about 83K total, with 53K of that non-deductible contributions. I have the option to rollover the rollover IRA into my current 401K. I've been holding the funds in the rollover since like 2005, so I have significant gains and a low basis (I know this isn't taxable if I roll it over). I'm in a pretty high tax bracket -- I think about 35%.
What should I do?
Should I rollover the rollover IRA into my 401K and then convert the non-deductible IRA account into a Roth IRA? I know I would have to pay taxes on the gains, I think at my regular income tax rate, right? I usually try to find ways to minimize my income at this stage of my life.
Should I stop making these contributions? I know the money grows tax deferred, but it will be taxed as income when I withdraw whereas if I just kept that money in a regular brokerage account it would be taxed at the capital gains rate, right? And I can access it anytime w/out having to worry about penalties.
Thanks in advance for any advice.