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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: of 75805  
Subject: Re: IRA Roth add to 564 Date: 10/26/1997 2:26 PM
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Greetings, Bellgarde, and welcome to Fooldom.

<<Have arrivedlate on the scene re Roth (have requested a rundown from TRP). A cotribution of $2,000 into a Roth ,which equates to about a $3,000 investment into a 401K,could be made into a UV2, but would result in odd lot purchases - say 2 x 25 x $40.

Questions 1. Who adminsters a Roth IRA plan and at what cost?

2.Can tfansfers be made from an IRA or an IRA rollover ? - with what consequences?

3. Any ideas on who might execute an odd-lot trade most efficiently under these circs?

4. Can the administration and aquisition costs be paid seperate (and inaddition to) the $2,000 that can be invested.>>


Have no fear, come 1/1/98 there will be countless brokers and mutual funds selling Roth IRAs. Costs will range from low to high depending on the who and what, but you'll find one to fit your taste without difficulty.

After 1/1/98 you may transfer funds from any existing IRA, rollover or otherwise, to a Roth without fear of penalty because of age. You will, though, have to pay ordinary income taxes on the funds transferred. One-fourth of the value of the untaxed IRA funds so transferred must be declared as income in 1998 through 2001, and you will be taxed on that income based on your tax rate in those years.

Virtually all brokers administering a Roth will allow odd lot trades. The costs thereof will be highest at a full service broker and cheapest at a discounter. All can handle the trades efficiently.

Trustee administrative fees can be paid out of your pocket instead of the IRA if the broker allows it, but commissions/costs of trades cannot. The latter will come from the proceeds inside the IRA at the time of the trade. If paid outside the IRA, they will count towards the annual contribution limit of $2K. This is a tricky area best explained to you by the trustee of the IRA.

Regards......Pixy
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