I know I can only contribute to one plan a year. What I'd like to do is terminate the American Century plan, and roll the money into an IRA
- a conduit rollver IRA for the pre-tax money, and my regular Roth IRA for the Roth money.
Is this going to raise any red flags? I know the IRS doesn't like you to terminate plans too often. Is there any "rule" about it? Would it be any different if I left the American Century plan sit there for a while and just didn't contribute to it?
2) As we get more and more "soak the rich" proposals (higher Medicare Part B premiums, now proposed Medicare tax on unearned income), it creates a clear bias in favor of Roth money. As I understand it, a withdrawal from a Roth is not recognized anywhere on your taxes. If you take $100,000 out of your IRA you look rich; if you take $100,000 out of your Roth, you look like a pauper. Am I right, as of now, that a Roth withdrawal doesn't show up anywhere? And, is there any reason the IRS can't at some later time make you show Roth withdrawals in your AGI, just somehow subject to a zero tax rate? I'm guessing that they would be legally barred from taxing them, but not from considering them as income for other purposes. Knowing that nothing is certain, in this case "even taxes," is there a consensus opinion?