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Greetings, Chuck, and welcome. You wrote:

<<Assuming that I intend to leave the money in there for quite some time, is a 6% admission fee so much to pay to have tax free future earnings on interest, and tax free distributions later when my kids go to college, build a house, or I hit the magic 59 1/2? I am hoping to contribute a large sum and to continue getting a good return on my investments.>>

As Tim aka FoolinUpNorth noted, that 6% penalty is not a one-time charge. Instead, it's an annual assessment that will continue until the excess contribution is removed. That means your money has to work just that much harder if you choose to leave it there. You could say, "So what? I'll invest in stocks and earn 11%, pay the penalty, and net 5%." That's true, but the same money in the same stocks even at a worst case would earn 7.92% after taxes for someone in a 28% marginal bracket. Which would you rather have?


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