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regarding the IRA mutuals:

1. are the dividends/gains generally reinvested? While the MPGFX site indicates that they are, the DODGX site didn't even mention it. Unless I'm missing something, why would you ever want to receive the dividends/gains rather then reinvest them... particularly with a Roth.

Many (most?) open-ended mutual funds will default to reinvesting all distributions (both dividends and realized capital gains)--the fund manager, after all, generally wants to maximize the amount of money under the manager's management (usually their compensation is tied to the money under management), so it is in their best interest to make it as easy as possible to have all distributions reinvested.

The Prospectus for the Dodge & Cox Stock fund (DODGX) is on the web( and it looks like they do reinvest distributions unless your elect to do otherwise.

(It is always recommended to read the Prospectus before investing in that fund or in that stock.)

2. Since they are in a Roth, I assume all reinvested dividends/gains are tax free. Is this true?

Well ... hmm... as long as the distributions remain inside the Roth IRA, there are no tax consequences. Likewise, if one follows the rules for tax-free withdrawals, there would be zero tax consequences. (There are cases where you can make withdrawals without penalty but still have to pay income tax on the gains, such as having the withdraw for qualified home acquisition costs.) But, yes, if you are planning on keeping the gains inside the Roth IRA (including the distributions) until you are 59.5 and had a Roth for at least 5 years, then, yes, it is tax free.

3. Do the dividends/gains reduce the max contribution I can make to a Roth? Thats is, say i earn $100 in 2003 from the 2001/2002 IRA accounts. Does that mean i can only contribute $2900 for 2003?

No, distributions are not part of the contributions. So if there is a distribution of $100 in 2003 and that remains completely inside the Roth, it is just part of the money still inside the Roth; you can still contribute the full $3,000 ($3,500 if you are 50 or older by December 31, 2003) for tax year 2003. And that is true whether the distribution from DODGX or MPGFX or other mutual fund is used for reinvesting in the fund generating the distribution or used for feeding another fund, money money account, or used to purchase stocks, just as long as the money remains in the Roth IRA.

4. Can I split any years IRA contribution between any number of custodians, or does it need to be one custodial account?

You can have any number of Roth IRA accounts. There may be custodial fees charted by the custodians, so it would be advantageous to keep the number of custodians few to keep the number of custodial fees few. But if your investment plan involves some funds and some stocks, it could make great sense to have part of your Roth IRA custodian sent to a custodian that does best with the funds (and often the fund family ends up being the best choice of custodian for funds owned by that fund family) and send the rest to a custodian that is a discount broker with a "self-directed Roth IRA" so you can invest in stocks through that custodian. The limit is a total of $2,000 for your Tax Year 2001 IRA contributions (Traditional IRA + Roth IRA), but you can send that all to one custodian, or split it up among different custodians, just as long as the total doesn't exceed $2,000. And, likewise, the total limit for Tax Year 2002 is $3,000 ($3,500 if you will be 50 by December 31, 2002) and can also be split up among different custodians, just as long as the total doesn't exceed the limit.

Note: time is getting tight for your Tax Year 2001 Roth IRA contribution, so you should get that taken care of as soon as you can, and be sure to indicate clearly how much money is to be your Year 2001 Roth IRA contribution and how much is to be your Year 2002 contribution.
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