I had a question regarding contributing to our roth IRA --
Our combined income is over the $150k limit and our max contribution is only limited to $2k. I'm wondering if we can take a penalty and still contribute the full amount into our Roth IRA. What are some of the implications and consequences for doing so? It seems like it would make sense to pay that penalty to add the extra $2k into each of our accounts. Any thoughts is greatly appreciated. Thanks in adv.
The 6% penalty is annual, not one time. It means that for the life of the investment, the first 6% of earnings goes to Sam. Kinda like having to make book at a bridge table.
-- Phil Marti Clarksburg, MD
Keep in mind that it's not a 1-year penalty. The penalty continues each and every year until the excess contribution is withdrawn or resolved. So you'll pay a $120 penalty (6% of the $2000 excess) each year.
-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us
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