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Mpenski writes:

<<THIS IS GREAT! I wish I knew about this years ago. Better late than never. Feeling dumb a bit earlier in the evening (still getting accustomed at how this whole website works) so I went back to review answers to other's questions. Please tell me if I am understanding correctly and am on the right track.

In my prior posting I asked what to do with my intention of investing $6,000 additional this year (I will be maxed on my SIMPLE at $6,000) TOTAL Investment in 1999 will be $12,000 (I hope).

I have concluded:

1) Open IRA and make 1998 payment before 4/15/99. DEPOSIT: $2,000 (Self-directed with discount brokerage)

2) Make 1999 contribution to IRA. DEPOSIT: $2,000 (the sooner the better)

3) Possibly open a taxable investment account or save for down payment on house/condo.(Suggestions???) DEPOSIT: $2,000

IRA QUESTION?:
If I think my AGI will exceed $90,000 and possibly $110,000 within the next 2-3 years, should I open a ROTH IRA or a Traditional IRA? I am a bit confused about my liability of choosing a ROTH. Any ideas?>>


Just one Fool's opinion, but personally I'd use the Roth until I could no longer do so. Then I would switch to the nondeductible traditional IRA. As far as making an excess contribution, that's reversible as long as you remove the excess and its earnings by 4/15 of the year following the contribution. See IRS Publication 590, Individual Retirement Arrangements for details. Also, in the last three days I explained how to handle that situation in one of the posts on this board.

Regards….Pixy

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