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paying $72 for a year or two may be more sensible than withdrawing the excess.
At this time while the market is down and the location of your investment also is probably down. Therefore, I would agree with you under ONE condition: I am not sure myself about the IRS and the penalty, but if all it is is $72, I would do that. One year I realized that I had gone over my $2,000 limit, but only by $50 and quickly just had that $50 removed from that year's Roth and applied to the following year.
Familiar with the "Rule of 72"? If not, it's simple and good to know.
Divide 72 by the rate of return and it will tell you how long it will take for your money to double. Of course, on mutuals or stocks, we don't get a constant return and sometimes a decrease. But, just use a number that you would consider your "average" return from your investment. 12% = 6 yrs.; 18% = 4 yrs.; etc. Over a period of 24 yrs, if you invest $1000 at 12%, in 6yrs. = $2000, 12 = $4000, 18 = $8000 and 24 = $16,000. Many think that if they get 18% their return, it will only be 1 1/2 that of 12%. However look at the following. 4yrs. = $2000, 8 = $8000, 12 = $16,000, 16 = $32,000, 20 = $64000, and 24 = $128,000!!! What a Dif.!!
Have a good day. So long as there's no prob. with the IRS, you're thinking just as I would. Wait 'til the market goes back up.
John Hunt
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