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Greetings, 2foolornot2, and welcome. You asked:

<<Ok, here goes, I have been contributing some money to a Roth IRA account I opened with a big mutual fund firm,let's call it tidylife(no prizes for guessing). I'm pretty irked with the amount of money I have to shell out while I'm actually giving them money to invest and make money!! I presonally think the whole thing is preposterous. Anyways, do a lot of discount brokers have an option of building a Roth IRA account? If so, how easy is it to move from tidylife to good-discount-broker's IRA account? Will I be taxed and/or do I have to pay any penalties for "early" withdrawal...
My other question is even more novice-like(what's the adjective of novice? no, that's not the question!). Do dividend re-investements count to the $2000.00 limit?>>

As Zev aka zgriner said it's really no problem moving your IRA to a discount broker. Just tell the one of your choice that's what you want to do and complete the basic application and transfer forms they will provide you. There will be no taxes or penalties to worry about because the money will go directly from one custodian to the other.

I'm sure the discounter will be more than happy to set up some kind of automatic deposit via a withdrawal from your checking account if you desire to contribute to your Roth a little at a time. Alternatively, you can send such contributions in on your own and at your own schedule.

Any dividends you receive or gains on the sale of investments within the IRA do not affect your annual contribution limit of $2K in any way.


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