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Author: FuskieFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25223  
Subject: Re: must transfer to better IRA Date: 5/1/2003 10:18 PM
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I recently had my taxes done at H and R Block, and they told me that there was this great new tax credit I could take advantage of if my retirement savings for the year added up to $2000

A Roth IRA is not a tax credit device. While the gains on the account may withdrawn tax free in retirement, the contributions are after-tax, unlike your 401K or a Traditional IRA contributions, which are deducted from your taxable income.

So basically, H&R Block took you for a ride, banking on your not figuring out their scam. Fortunately you are Foolish, and saw through their evil plan. BTW, the contribution limit for 2002 and 2003 is $3000, not $2000.

You did not mention whether they opened the Roth as a 2002 contribution before April 15th or as a 2003 contribution. Either way, you may be stuck - I bet there is a penalty for closing the account or selling the funds within the account within a period of time. If so, I would challenge them saying that they deceived you with their claims.

You can manage your own Roth IRA with no annual fee at Scottrade. They have an on-line site as well as branches around the country. There is no fee for buying or selling over 8000 mutual funds, and stock transactions are at a low rate. There is a also a Scottrade board here if you want to find out more about them.

If you can get out of the H&R trap, transfer your Roth to Scottrade or some other place that does not penalize you for not building a maintaining a high balance when you can only contribute $3k a year in the first place.

Also, if you are not already doing it, maximize your 401K contribution. If you do not like your fund selection in the 401K, then at least contribute enough to earn full employer matching, if any.
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