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Strategies & Market Trends : Roth IRA ideas -- Ignore unavailable to you. Want to Upgrade?

To: Michael G who wrote (91)	4/3/1998 10:24:00 PM
From: mod	Read Replies (2) \| Respond to of 388

<<I was told today that if you rollover a traditional IRA into a Roth, you can no longer contribute to that Roth. You can open up a NEW, separate Roth IRA, but that one is frozen to new contributions. Is that true?>> Yes. You can have both a conversion Roth and a new money Roth, if you qualify, but they have to be kept separate. You can't add new money to a conversion Roth. Dennis

To: Michael G who wrote (91)	4/21/1998 2:45:00 AM
From: Steve Joyce	Respond to of 388

Since all I do all day is answer these questions for a living I had to chime in. The money is kept separately due to the 5 year waiting periods. On a conversion nothing (principal or earnings) can be touched without penalty within the five year period. In a contributory Roth the contributions can be taken out penalty free at any time but the earnings must stay for the five year period. Therefore it is much easier to just keep them separately. Most, if not all companies will not charge you for two separate IRA accounts however. The principal is similar to ROL's and contributory traditional IRA's. SJJ