Roth/401K/IRA

[Guest Quoinintl]

I would appreciate a little education...

I converted an IRA in 1998 to a Roth (still active);

I also have a 401K with my employer...

Can I open another IRA and if so, are there any restrictions?

Thanks in advance

[papogi]

You can have as many IRA accounts (regular or Roth) as you want, as long as you don't contribute more than $3000 (as of 2002) each year to all of them in aggregate. You can contribute to your existing Roth IRA, and/or you could open another one. Keep in mind that many IRA custodians charge a $10-25 fee each year for each account, so don't open another IRA if it mostly mimics a current one you already have. It would then be better to simply add to your existing IRA. As far as paperwork and fees, it's easier to have fewer IRA's. Depending on your diversification based on your IRA investment selection, having 2 to 4 IRA's is not uncommon. It all depends on your time horizon, current diversification, and risk tolerance.

Before you add to your existing IRA or open a new one, be sure you are maxing out any employer match dollars in your 401K.

[MGB]

Although you can have one, whether or not the contribution is tax deductible is dependent on your adjusted gross income. If your income is too high (different amounts depending on marital status and there are phase-ins that make some of it nondeductible), you can contribute the $3,000, but it will not be deductible (the earnings are still tax-deferred). In this case you are better off contributing to the Roth. However, if your income is very high, you cannot contribute to the Roth and only have the nondeductible IRA available.

[Guest Quoinintl]

thanks for the info...

Quoinintl