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I am planning on starting a Roth IRA, but am unsure about which taxable year to start. I am not entirely sure that I understand the difference between putting 1998, 1999, or 2000 (other than they are different years of course). Could someone help me out on this? Thanks so much!

Erik
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You are too late for 1998.

If you choose 1999, the 5 year holding period starts 1/1/1999 even if you make your contribution 4/14/2000. Giving you a headstart of up to 15 1/2 months.

*Cat
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<<oldholden wrote: I am planning on starting a Roth IRA, but am unsure about which taxable year to start. I am not entirely sure that I understand
the difference between putting 1998, 1999, or 2000 (other than they are different years of course). Could someone help me
out on this?>>

oldholden,

It's too late for the 1998 deposit. For your $2000, it would be better to put in in for a 1999, rather than 2000, contribution. The reason is that if you come up with some extra funds within the next year you can put them in as Year 2000 contributions, making the total contributions to your IRA account up to $4000 ($2k for 1999 and $2k for 2000). If you started with Y2000 contributions, you can only put in $2000 until next year--2001.

By the way, if you can afford to, put in your contributions as early in the year as possible. You will have more money to retire with because the money will have an extra year to grow tax free and the extra growth on that growth (compounded growth) will continue until you take funds.

DFF


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