If I may intrude, I too withdrew a few matured IRA CDs in 2006 and thought it natural that because I reinvested it within one week into another bank, as an IRA (but with juicier interest hehehe) I wouldn't be sent the dreaded 1099R but I was. I've been handling my IRAs for years, and I don't recall being sent 1099s in the past for IRAs, but I think when my IRAs matured in those years, the institution would automatically give me some IRA forms which I presented to the bank opening my new rollover, hence, no 1099R...but I'm not sure. To avoid this I learned it's best to transfer from institution to institution which I'm just doing now. However, I have a problem about this particular rollover and hope someone could help? I just today arranged a rollover/transfer of my matured IRA but only now, after having mailed all the papers, I remembered one cannot make more than ONE rollover per year. Since this new CD is only for 3 months with a terrific interest, if I don't like the new rate after the 3 month maturity I won't be able to roll it over until a year from the time I opened this new IRA account and will be stuck... :( Am I correct? Or is there a way around to escape the new (probably) lower rates on maturity? One phone employee told me that on maturity it may go down about almost a whole percent (0.95%). Thanks so very much for any suggestions! Adela

Be aware you will probably pay a fee for closing out the IRA and moving it. Standard stuff, just so you know. Banks tends to charge higher management fees than a good discount brokerage, and offer a generally poorer choice of funds to pick from. If you are scared of the market and want to keep the money in CDs, check out the bank they are currently held at as to how their rates compare against the competition. The website http://cdrates.bankaholic.com/ shows you rates and can sort by term, but they do not verify the financial health of the bank. Do some homework here and pick a bank thatÂs safe even if not the highest fractional return. A lot of banks are in trouble but the FDIC doesnÂt publish that list so it can be hard to find out if a bank is real danger of being taken over. If you don't know how to move an IRA I would certainly not classify you as someone who should be investing in individual stocks! Mutual funds (stocks aka equities) and short-term bond funds would be a better investment. To move an account, open an account at any brokerage or financial institution  theyÂll usually let you do it on-line  first. See my caveats below about proper titling. THIS IS IMPORTANT! Once the account is active (entered into the system), the brokerage/FI will contact your motherÂs bank and get the funds transferred over. You do not and should not ever have to Âtouch the funds. Schwab ranks high for customer service and widest variety of available funds. Vanguard is discount but you can only invest in Vanguard funds - they have some very good ones but also some real dogs with similar names so it can be tricky. There's an analyst who posts on-line and he specializes in Vanguard funds only, with interesting analyses of why one fund is a good investment but another similar Vanguard might not be. This is fascinating reading but more than you probably want to do. Similar to Vanguard but with several funds ranked highly by Money magazine for overall return in their recent survey is T. Rowe Price. You might want to check the Money magazine website to read the full results of the survey article. Fidelity is the biggest pension funds broker/manager but I donÂt consider them the best from a funds standpoint. Caveats: The 2 critical things about Inherited IRAs are titling and distributions. You can have IRS difficulties if either of these is messed up. Wherever you move your IRA to, stay on top of these issues, because the IRS considers it your responsibility, no one else's. Titling an Inherited IRA: NEVER combine an Inherited IRA with your personal IRA funds. The title of the account should be: "Inherited IRA deceasedname fbo yourname". So if I inherit an IRA from my mother, it is titled "Inherited IRA Susan B. Anthony fbo JKom51". FBO means 'for benefit of' and it is acceptable to use the acronym. - Distributions must continue if your mother was taking them, but they are calculated on your life expectancy.

You'll probably have multiple employers over time. Set up an IRA at a good low cost broker - Vanguard, T. Rowe Price, Fidelity - and when you leave a job, roll your 401(k) monies into your IRA. Consolidation will make not only your paperwork easier to create a proper allocation mix (and annual re-allocation), it will also be a great relief to your heirs. Yes, I know you're young and healthy, but believe me, it is a LOT easier to keep the beneficiary designations updated on ONE consolidated IRA account, rather than the half-dozen assorted 401(k)s you've created after a while! Right now my nephew/niece and I are beating up on their dad (figuratively, of course!) because he has 401k funds at possibly 7 or 8 companies. I think my sister, his ex-wife, is still listed as beneficiary on most of them. Since she's got a million bucks in the bank and is semi-retired by choice, and he'd prefer the money go to his kids, it seems rather foolish to be risking letting his paperwork go - particularly since he suffered an unexpected heart attack recently! Really, you'll find life is much simpler if you consolidate your accounts. All it usually takes, once you've set up the IRA, is a phone call and a few simple pages to fill out.

I had seen an article on this subject in the WSJ, so I needed to do a search to pull it up again. Here's the pros and cons: WSJournal Investing, November 2, 2008 IRAs May Be Ripe For Shift to Roth One of the simplest ways to take advantage of the continuing market turmoil: Convert your battered investments from a traditional individual retirement account to a Roth IRA. When you convert traditional IRA assets to a Roth, you have to pay the income taxes upfront on the account's value -- and in some cases, those values may be next to nothing at the moment. With a Roth IRA, there are generally no taxes on withdrawals or any future earnings, unlike with traditional IRAs. There's also no mandatory distribution schedule -- again in contrast with traditional IRAs, from which account holders must begin taking minimum distributions by April 1 of the year following the year they turn 70 years old. Plus, you can leave a Roth account intact for your heirs. (Heirs other than your spouse would have to take required withdrawals each year, but they generally wouldn't owe any tax on them.) To be eligible to convert traditional IRA assets to a Roth, your income must be $100,000 or less. So any hit that your paycheck has taken from the economic downturn might help you do a Roth conversion. (Starting in 2010, there is no longer an income limit for Roth conversions.) Neither a required IRA distribution nor the converted amount would count against the $100,000 income limit. If you are 70½ or older, you have to take this year's required distribution before converting any traditional IRA assets to a Roth. Withdrawal Rules Many IRA holders get tangled up in the "five-year" rule when they convert IRA assets to a Roth IRA: You have to hold those assets in a Roth for five years or until you turn 59½, whichever comes first, to make penalty-free withdrawals of converted amounts. Each conversion has its own five-year clock. But if you have already reached age 59½ and you convert traditional IRA assets to a Roth, you can withdraw the actual assets you convert at any time without worrying about a five-year deadline or penalties. It's a different story with any earnings on those assets: Again, you must have held a Roth account for five years to withdraw any earnings tax-free. But you don't need to worry about separating the converted funds from the earnings; that's because the withdrawal rules for Roth IRAs say that any distributions first come from contributions, then from conversions, and finally from earnings, says Ed Slott, an IRA consultant in Rockville Centre, N.Y. Chuck Bauer, a 62-year-old manager in Pittsburgh for Aker Solutions, an engineering and construction company, has a combination of market losses and lower-than-normal income this year. So he is taking the advice of a local financial planner, Bud Kahn, and converting his IRA to a Roth, he says. Mr. Bauer will have to pay about $29,000 in income tax on the conversion, but "we think the account has gone down about $32,000," says Mr. Kahn. "When the account recoups its losses, he will have made up the taxes that he paid. And then that recoupment is never going to be taxed again." Changing Your Mind What if you converted traditional IRA assets to a Roth earlier this year, and those assets have declined in value? In that case, you may want to "recharacterize" the Roth as a traditional IRA. It's a way, says Mr. Slott, to "erase the taxes" on value that has since disappeared. Frank Russo, a 66-year-old Verizon Communications retiree in Port Washington, N.Y., recharacterized IRA investments that he had converted to a Roth after watching their value fall at least 15%. "I don't have to pay tax on an amount that no longer exists," he says. To do a recharacterization,you have to use a "trustee-to-trustee" transfer, also called a direct rollover or direct transfer, to move the contribution from one IRA to another. Don't touch the money yourself, and make sure no checks get made out directly to you or deposited in your bank account. The assets are treated as if they never left the traditional IRA, Mr. Slott says. If you recharacterize your Roth as a traditional IRA by Nov. 30, you could then convert the lower-value assets to a Roth again as soon as Jan. 1, he adds. See IRS Publication 590, at www.irs.gov, for information about traditional and Roth IRAs.