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Phil and fools,

Thank you for the reply.

In my ROTH there were gains on the 4000, in the neighborhood of 6.5% over the year. I suppose paying the 6% penalty, $240, makes it a wash, probably better and easier than going through the act of withdrawing funds, declaring the income and paying a penalty. I will have earned income in 2007, so I suppose leaving it alone makes the most sense.

In my wife's account the 4000 bought Johnson and Johnson's which for the year showed a slight loss. At first glance I thought it made sense to withdraw, pay the under 59 penalty and start fresh this year, BUT, $400, the 10% penalty, would be higher than the 6% excess contribution penalty.

Seems I should just leave both alone, make no contributions this year and pony up the $480 (240 for each account) and make some better investment decisions for 2007 ;-)

What do you think?

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