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Author: mayoress Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75792  
Subject: 2-part? re: Roth and other IRAs Date: 1/30/2000 11:25 AM
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Wonderful husband has a retired Ira that we are considering rolling into a Roth (We have 'crunched the numbers' and have a fairly good understanding that this is a no-brainer for our financial situation.)
My ? is this: Can he contribute the $2000 non-ded. max. since he now has part-time employment of approx $7000per yr. into this account?
If not, can we OPEN a 2nd Roth and make this contribution?
We file jointly, are in the 28% tax-bracket and are eligible.
I am self-employed. I fully fund my Simple Ira-$6000 per yr.
My 2nd ? is: I want to open a Roth for myself at Vanguard. Since this will be in taxable investments, what fund choices are good for me? My Simple is mostly invested in U.S. Mutual funds-Growth and Growth & Income. I also have VFNIX (Vanguard S&P 500 Index) in a separate taxable account. Thank you for the opportunity to ask . Some of these issues are confusing. Mayoress
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18468 of 75792
Subject: Re: 2-part? re: Roth and other IRAs Date: 1/30/2000 11:50 AM
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If you spouse has $2K of earned income, he can contribute $2K to his Roth. But that $2K is the total contribution to all of his IRA and Roths combined. So opening a second Roth account will not allow additional contributions.

Your Roth should be invested in stocks. More S&P Index Fund is not a bad choice. For more conservative accounts, some would include an international fund and a small cap fund in the mix to the extent of about 15% each. For more aggresive investing, some would include a hot sector fund like a technology sector fund. But look out, the tech sector has been weak recently. It could be a great time to buy or we could be in for a rough year with them. Depends.

Best of luck to you.

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Author: mayoress Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18474 of 75792
Subject: Re: 2-part? re: Roth and other IRAs Date: 1/30/2000 12:58 PM
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Thank you for such a quick response. Conserning my first?, I need to state it more clearly: I understand that I can only fund 2K per yr in Roth & that it is non-deductable. By further explanation, The Ira my WH (wonderful husband) holds has been "frozen" for 4yrs. i.e. he has not been able to contribute to it as he had no earned income. He recently (1 Jan) became employed part-time, will earn approx. 7K this year, and my ? is: If we roll this current Ira into a Roth ( or even if we leave it alone) can he contribute to IT? Or do we have to leave that as it is and open a new Roth for his new contribution ? (clear as mud, huh?)
thanks for your patience with these 'foolish' questions! Mayoress

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18475 of 75792
Subject: Re: 2-part? re: Roth and other IRAs Date: 1/30/2000 1:25 PM
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Mayoress asks:

<<I understand that I can only fund 2K per yr in Roth & that it is non-deductable. By further explanation, The Ira my WH (wonderful husband) holds has been "frozen" for 4yrs. i.e. he has not been able to contribute to it as he had no earned income. He recently (1 Jan) became employed part-time, will earn approx. 7K this year, and my ? is: If we roll this current Ira into a Roth ( or even if we leave it alone) can he contribute to IT? Or do we have to leave that as it is and open a new Roth for his new contribution ? >>

Yes, you may contribute to that IRA as it is or after it's been converted to a Roth. You do not need to open a new account to make the contribution.

If you leave the IRA as it is, you might even have a deductible contribution depending on your joint AGI and your husband's participation in a retirement plan through his job. For details, see our IRA area at http://www.fool.com/money/allaboutiras/allaboutiras.htm. If you convert to a Roth, then the contribution to that Roth would be nondeductible; however, the money and all earnings would ultimately come back to you free of taxes.

Regards..Pixy

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18499 of 75792
Subject: Re: 2-part? re: Roth and other IRAs Date: 1/31/2000 3:12 AM
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<<<<By further explanation, The Ira my WH (wonderful husband) holds has been "frozen" for 4yrs. i.e. he has not been able to contribute to it as he had no earned income.>>>>

If you had earned income, then I believe your husband could have contributed to his IRA as a spousal IRA. At one time spousal IRAs were limited to $250, but it has been $2000 for awhile now. I am sure that the resident pros will be able to tell us the tax year it changed.

Just my $0.02. Regards, JAFO

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