ROTH IRA ???

[Iron_Gook]

TweetI've got a question regarding transfer of a Roth IRA. I had a Roth IRA closed yesterday so I can transfer the assest to another financial institution. I understand that I will not be assessed any penalties as long as I re-establish a Roth IRA within 60 days. Once I do this, for what year to I place the Roth IRA assest too? 2006? 2005? I'm a little confused about that... any help is greatly appreciated in advance.

IG

[lxorl]

Tweetcheck with Trip... he knows his investing..

[angryoldman]

TweetMy credentials are that I'm a VP of a bank. Just so you don't think I'm a whacko or I'm going to get you arrested or penalized for misplacing funds.
You do have 60 days to reinvest your funds. You can place your roth in for 2006 since there's no tax advantage for prior year deposit. A roth IRA, you pay the interest going in, and collect your money tax free at a minimul age of 59 1/2. Cool?

[supasaiyan99]

TweetWhy can't he put it in for 2005? I thought you had until April 17th to put in money for 2005. There is a $4k limit on how much you can contribute each year, so if you already contributed $4k for 2005 then put it in for 2006.

[angryoldman]

Tweet

Why can't he put it in for 2005? I thought you had until April 17th to put in money for 2005. There is a $4k limit on how much you can contribute each year, so if you already contributed $4k for 2005 then put it in for 2006.

There's no tax advantage for him to put it in for 2005. If it was a traditional IRA, then he could put in $4000, then use the $4k for a tax deduction. But since it's a Roth, there's no prior year advantage. And since it's a rollover, it doesn't matter.

[trip]

Tweetditto angry

just get it rolled, the govt be real picky about them dates, and penalties

just to be 100% safe, which is the best way with money, ask your new institution this question

[supasaiyan99]

Tweet

There's no tax advantage for him to put it in for 2005. If it was a traditional IRA, then he could put in $4000, then use the $4k for a tax deduction. But since it's a Roth, there's no prior year advantage. And since it's a rollover, it doesn't matter.

I see what you mean. I just look at it as an opportunity to max out more money for 2006 if he put's it in fr 2005.

[Iron_Gook]

TweetOkay so I put the 20K that I've got from my Roth into a Roth at my new institution. Does that count against the 4K that I can contribute for this year? I already contributed 1K for 2006.

IG

[TestRip7]

TweetWhen is the next time that the yearly amount one can put into a Traditional or Roth IRA will be increased.? Isn't the normal increase btwn. $500 and 1000.?

[Iron_Gook]

Tweet

When is the next time that the yearly amount one can put into a Traditional or Roth IRA will be increased.? Isn't the normal increase btwn. $500 and 1000.?

I believe it's 2008 the amount will go up to 5K annually... there are provisions to increase that amount if your over a certain age...

IG

[TestRip7]

TweetSweet Deal... I just started a Roth IRA last year.

[supasaiyan99]

Tweet

I believe it's 2008 the amount will go up to 5K annually... there are provisions to increase that amount if your over a certain age...

IG

Yep...that's what I heard too!!!

[angryoldman]

Tweet

Okay so I put the 20K that I've got from my Roth into a Roth at my new institution. Does that count against the 4K that I can contribute for this year? I already contributed 1K for 2006.

IG

No, it's a rollover. You get a once a year transfer. So you can still put in your full amount of $4k this year.
As for contribution amounts, if you're under the age of 49, you can contribute $4000 per year, per spouse, untill 2008. It then becomes $5000. If you are over the age of 50, it's $5000 for 2006 and 2007, then up to $6000 in 2008.

[Iron_Gook]

Tweet

No, it's a rollover. You get a once a year transfer. So you can still put in your full amount of $4k this year.
As for contribution amounts, if you're under the age of 49, you can contribute $4000 per year, per spouse, untill 2008. It then becomes $5000. If you are over the age of 50, it's $5000 for 2006 and 2007, then up to $6000 in 2008.

Thanks AOM. I appreciate the clarification.

IG

[angryoldman]

Tweet

Thanks AOM. I appreciate the clarification.

IG

Anytime I can help a fellow Asian American brother out, I'm happy to. Anymore questions, just PM me.