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>First, I've heard that the IRA maximum contribution
>will be increasing soon. Any truth to this?

A bill to increase limits to $5,000, as well as allow for Roth-like treatment of after tax 401K contributions passed the House by a wide margin and was passed (I think unanimously) by Senate committee. When it became apparent that Cl9inton would veto the legislation, it was shelved until the Bush administration moves in. Bush is sure to sign the legislation.

>Second, I want to invest $2,000 in a Roth IRA for
>the last tax year, and $2,000 this year. I'm 26,
>and I'm willing to take risks. I liked the foolish
>4, but am not so sure anymore. Anybody have
>suggestions for an investment strategy?

Index funds.

>Third, I know that if you make over a certain
>amount, you can't invest in the Roth IRA. I've
>heard at least three different figures so far,
>the highest being 150,000. Does anybody know
>what this amount is?

The ability to contribute to a Roth IRA begins to phase out for income over $150,000, and no contributions are permitted over $160,000.

Another limit (I believe it's about $100,000) is for conversions of existing Traditional IRA's to Roth's.

>Fourth, what happens if, for example, I invested
>$2,000 in the foolish 4 in a Roth IRA. Next
>January, let's say my stocks did well and my
>account is up to $2,500. I then want to rebalance
>my portfolio and pick new stocks. Can I do this,
>or will I violate some rule because I'm
>technically "putting" in $500 more dollars than
>I'm allowed to? I'm really confused about this
>last point.

Growth on assets already in the IRA does not affect your ability to make new contributions. Assuming your meet the income guidelines, you can contribute $2,000 every year, regardless of how well your investments are performing.
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