I am considering opening a Roth IRA but I am concerned about the imcome limits. I have not reached the $110k income limit but in any given year I have the potential to do so. If I invest in a Roth IRA and in any given year I go over the income limit, what happens at that point? Do I have to close the Roth, does what I have in there stay but I can't contribute further? Also what's the max I can invest in the Roth?


Once you make the contributions to the Roth, they stay in there. The income limits only apply to new contributions in a new tax year, but has no effect on existing contributions that are already in the account.

My DH go up and down on if we can qualify for a Roth. To date, we have qualified for contributions exactly 2 years, and they've been the years that I have been unemployed. In those years, I have made the maximum $4k contribution to each Roth IRA, but the money just sits there and grows even if I can never make another contribution.

I don't contribute to our Roths until I have done our taxes in any year to see where we fall so that I don't have to worry about the gyrations in removing the money or recharacterizing.

For 2006, I am actually expecting that we just might squeak under the limit, so I'm prepared to make our 3rd contribution. That will give us enough money so that we're not paying account maintenance fees finally [I've got these accounts at Vanguard], so that is something you might want to consider in deciding where you put your account and what you might want to have in it for investments.