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My question may be of a rhetorical nature, but deserves to be thrown out for all to ponder or enjoy with rounds of laughter...

My wife had very small amount of money (less than $150)in a traditional IRA, which renewed each year. She had never contribute anything to it, it was opened because she had to rollover contributions somewhere when she left her previous job. She recently closed the account and received a check for the proceeds. I was considering on directing her to open a Roth IRA, but realized this is basically a mutual fund with management fees. The way I understand it, she has 60 days to decide whether to invest elsewhere or pay the penalty.

I like the idea of not having to pay taxes on accumulated earnings in the future, but wanted to get a Foolish perspective. I have searched the Boards, but only came up with one message from Sir Tom (which carries ALOT of weight on its own), which was mainly anti-IRA.

I was thinking of taking the penalty and putting the money in a DRP. What do you think?

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