It is always a good choice to fund the individual retirement account (IRA), even if the owner is not eligible to claim the deduction. The IRA owner can still choose to invest the amount in the same funds within the IRA, where the earnings are tax deferred. The individual may also establish a self-directed IRA, in which he or she can diversify the portfolio to include stocks, bonds, mutual funds and any other investments allowed by the IRA custodian. When compared with a deductible contribution, the only benefit that is forgone is deducting the contribution, but this is rectified on the back end, as distributions of non-deductible contributions are tax and penalty free.
This question was answered by Denise Appleby