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Subject:  Re: (stupid) IRA contribution question Date:  2/11/2004  11:32 AM
Author:  babyfrog Number:  39161 of 88797


You can only contribute a total of $3000 to your IRA for each year.

Any commissions or other transaction fees have to be paid out of the account balance. You can pay any annual account maintenance fees out of another pocket, if you prefer, but commission and transaction costs need to be paid from the account.

In your particular case, you can write two checks, one for $1000 to cover your remaining 2003 contribution, and another for any amount up to your elegibe contribution limit (likely $3000) for 2004.

So if you wanted to buy the index fund with a $1000 minimum and a $10.00 brokerage purchase commission, you could write a check for $1000 as a 2003 contribution, and if elegible, another check for $10.00 as a 2004 contribution, and wait until both checks had cleared before making the purchase.

Most mutual funds either don't charge purchase commissions or charge them as a front-end load, whereby you buy $1000 worth of the fund and get (for example) $950 worth of fund, $50 worth of transaction fees taken out of the purchase price. If your broker charges you a commission to buy mutual funds, on top of any fraction of the various fee kickbacks they may receive from the funds, you may want to consider a different broker...

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