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My online broker was unable to answer these few questions:

1) Is it possible to put money into an existing Roth IRA account on a monthly or quarterly basis? (I just opened my new Roth account for 1998 with $2000 and I now want to start adding for 1999 but I dont have the full $2000.)

2) If I sell the stocks in my account do I have to buy new stocks immediately or can I keep that amount in cash until I decide what new stocks to buy?

3) Do I have to open a new account for each individual year in my Roth? (ie seperate accounts for 1998, 1999, 2000....etc) Or is it acceptable (legal) to have one account only?

Any help is greatly appreciated,
skibum

P.S. Thanks for your help with my last question TMFPixy
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1) Yes you can add gradual deposits into a ROTH IRA during the year. You just have to make sure that you never contribute more than 2000$ per year (you cannot put more than 2000 in and say that the additional money is part of my next years contribution).

2) You do not have to hold stocks at all times. You can have the money allocated however you want, cash, funds, stocks etc....

3) no, you just deposit into the existing account for future contributions

hope this helps
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Skibum73 writes:

<<My online broker was unable to answer these few questions:

1) Is it possible to put money into an existing Roth IRA account on a monthly or quarterly basis? (I just opened my new Roth account for 1998 with $2000 and I now want to start adding for 1999 but I dont have the full $2000.)>>


Almost all brokers allow that. In fact, I know of none that don't. Just send the money to the account via a cover letter that clearly designates it as a contribution for tax-year 1999.

<<2) If I sell the stocks in my account do I have to buy new stocks immediately or can I keep that amount in cash until I decide what new stocks to buy?>>

You may trade when you are ready to do so. There's no requirement for immediate purchase.

<<3) Do I have to open a new account for each individual year in my Roth? (ie seperate accounts for 1998, 1999, 2000....etc) Or is it acceptable (legal) to have one account only?>>

No, you don't. All you need is one account. As you make your deposits, just designate them clearly as being for the tax-years involved.

Regards….Pixy

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<<3) Do I have to open a new account for each individual year in my Roth? (ie seperate accounts for 1998, 1999, 2000....etc) Or is it acceptable (legal) to have one account only?>>

The main reason for opening multiple accounts is not to mix money from different sources. IE money from former employers 401k and money that you have deposited directly. If for some reason you want to move the money back into a new 401k somewhere else.

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skibum73 wrote:
1) Is it possible to put money into an existing Roth IRA account on a monthly or quarterly basis? (I just opened my new Roth account for 1998 with $2000 and I now want to start adding for 1999 but I dont have the full $2000.)

You can do this, but I recommend that you don't. Instead, build up the money in a savings account over the course of the year and deposit it next year, after you do your taxes. The only time you should not do this is if you are absolutely certain that you won't exceed the AGI limit for contributions. If you add the money gradually over the course of the year and then find out you're over the limit, you'll have to go through the painful and poorly-documented process of backing out those contributions and the gains they've made. I've been there, and it's not worth the trouble.

2) If I sell the stocks in my account do I have to buy new stocks immediately or can I keep that amount in cash until I decide what new stocks to buy?

You can do whatever you want. If you sell some stocks you can keep the money in cash for as long or as short a period as you choose, from seconds to years.

3) Do I have to open a new account for each individual year in my Roth? (ie seperate accounts for 1998, 1999, 2000....etc) Or is it acceptable (legal) to have one account only?

You can put the new money into the account you already have. There are a few circumstances where you don't want to do that, the most important being the case of a Traditional IRA which consists entirely of a rollover from a qualified plan and which you might want to roll over to another qualified plan in the future. As soon as you contribute to such an account the IRS prohibits you from rolling it over again. All the other situations where you might want to put new money into a new or different account have to do with personal choices like opening a new account with a new broker or stuff like that. They don't come up all that often.

Piz
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