I need to recharacterize my 1999 Roth IRA contributions to a tradition IRA account. Going forward, it occur to me that I will have a choice of contributing to a Roth or Regular IRA. Since I'm in a volatile trading business, I don't know exactly how much I'll earn in any year. Is it wise to simply contribute to a Roth IRA and then recharacterize it if I exceed the limit or are there hidden penalties for recharactizing Roth? aside from the paper work headaches - are there any other drawbacks doing this all the time?

Thanks

The only drawback is the paperwork. You can save yourself some computational headaches by putting the annual roth contribution into a brand new account. When you're sure that it can remain a roth, you can then transfer it to the existing roth.



------------------
Barry Picker, CPA/PFS, CFP
New York, NY