Let me start by saying that I am a complete newcomer to all of this. I am now self employed and do not know if I will earn enough to even _make_ a contribution this year--that said:

I currently have a Traditional IRA with DWR ($30.00 per year fee) with very little money in it. I also have a 401k from a former employer with even less money in that! I'd like to get this all combined into one Roth IRA. What is the easiest and cheapest way to do this? And can someone recommend a cheaper account manager than DWR for the Roth?

My husband has a "Public Utility District Money Purchase Pension"--can this be rolled into his own Roth IRA without a penalty? And if so, how long before he can take that money out and invest it in an "investment" property?

Again, I apologize for my abysmal lack of knowledge on this subject,

Thanks,

Jennifer

In order to convert a traditional IRA into a Roth, you must meet the IRS' eligibility, i.e., your modified adjusted gross income must be less than $100,000 (less if you and your spouse file separate returns). If you qualify, you may convert all or part of the traditional IRA to a Roth, but it will create a taxable event. The amount converted will be included in your gross income for the year in which the conversion takes place, and you will have to pay tax on it (no 10% penalty applies, though). From then on, you will enjoy the benefits afforded a Roth IRA.

Money distributed from a 401(k) plan or any other pension plan can be rolled to a traditional IRA. Then, that IRA may be converted to a Roth as described above. You cannot make a direct rollover from the pension plan to a Roth IRA.

Hope this helps.

Thank you Michael, it does help!

Jennifer

You have multiple options. First find a new custodian with the right mix of investment options and service fees. I believe that some of the internet based discount brokerages have no IRA fees, like Etrade. Others like Schwab eliminate the fees once your assets exceed something like 10K. Some custodians will waive IRA fees if you just ask, or if you have other business connections with them. Once you select the new custodian, use their forms to request a transfer from the other custodians. Ussually this entails filling out a form, signing it and attaching a copy of a prior monthly account statement from the old IRA. The destination custodian will arrange for the transactions... but keep tabs on the process to make sure it gets done. One IRA can suck up multiple IRA fragments (just those associated with one person, no combining husband and wife accounts).

This process will take a few weeks, but when completed you will have one regular IRA and can then decide if you want to do a Roth conversion. You may want to consider a multi-year partial Roth conversion to avoid tax bracket jump.