OLD ROTH

[Guest SRajan]

This may be a very simple question but I am new to financial planning. I contributed to a Roth (Mom's gift) a few years ago when I earned much less than the AGI limit. It was a one time contribution. I now earn more than the limit - what do I do with this Roth? May I keep it there? Invest with it? Or do I have to move it to something else?

Thank you,

SRajan

[Michael Devault]

You may keep it as a Roth IRA. The AGI limit is a test for making contributions each year. But, once those contributions are made, they can stay in the Roth IRA.

Hope this helps.

[John G]

Do you mean that you contributed to a Roth for your mother? If so, then her income determines eligibility. If she contributed for a Roth for you (a very nice mom indeed) than your income determines ability to contribute in any given year. Once legally created (meeting earned income and max income regs) the Roth can continue. You have many investment choices: bonds, mutual funds, CDs, stocks, etc.

If you mom has earned income, perhaps you should help fund a Roth for her. In an odd way, this could be a end-run around the limitations imposed upon you due to income. For example, if you mother works part time you could fund a Roth for her and somewhere down the road might then inherit it from her.

Also, you can still make a 2000 tax year contribution if you were eligible in 2000.

[Guest SRajan]

Thank you both; I really appreciate your help (and have read your comments on other questions as well, also appreciated). Mom had given me the Roth to encourage me to start saving. I'll see if she qualifies for one as well.