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The
Scoop on IRAs
Q:
Where should I open my IRA?
A:
Find a no-load mutual fund company that offers you the option
of investing your IRA
in funds with low expense
ratios. At the very least, the company should have a stock
fund, a bond
fund, and a money
market fund.
Also,
research the company’s rules. Some companies require IRA customers
to make an initial contribution of only $250, while others demand
$1,000 or more to open an account. And choose a firm that can
establish an automatic savings program linked to your paycheck
or your savings or checking account.
Q:
Are there any IRA fees I should watch out for?
A:
Yes. One common practice is to tack on an IRA maintenance
fee of between $10 and $30 a year. Sometimes the fund company
will waive the fee if you maintain a given minimum amount in your
account.
Q:
What’s the deadline for contributing to an IRA?
A:
The deadline is April 15 of the following year. If,
for example, you suddenly realize on January 1, 2001, that you
forgot to make your 2000 IRA contribution, you’re still okay;
you have until April 15, 2001 to contribute to a traditional and/or
Roth IRA for tax year 2000 (and deduct it, if you can, on your
2000 return).
Q:
Can my parents give me the money to open an IRA?
A:
Yes. You can establish and contribute to an IRA if you (or your
spouse, if you are filing jointly) receive any taxable income
during the year.
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