I agree with you two completely; that is definitely one reason why I am starting early. Also, she will be 48 this year (almost 50 was slightly misleading), so she cannot quite make the $24,000. I am highly advising her that she contribute the max she can which is $18,000 this year and to max out her IRA contributions at $5,500.
She is in the 28% income tax bracket, so I am going to help her set up a traditional IRA that is separate from her rollover IRA. I am unsure of how the taxes are handled with the rollover.
This leads me to an additional question. Apparently, her rollover contained the remnants of a 401k (tax-deferred) and some sort of nontaxable Roth 401k or IRA. She wasn't exactly sure. If these get rolled into one account though, how are taxes handled? Do you pay the taxes on the 401k at the time of rollover making the funds nontaxable? Perhaps this is more of a question for Vanguard.