Money-burdened investor can undo an illegal Roth conversion


ROTH TRAP: Did you convert your regular IRA to a Roth IRA late last year? Mutual Funds magazine warns, "Year-end mutual fund distributions could push your adjusted gross income over the $100,000 limit for converting a traditional IRA to a Roth.

"Here's what to do: If you have already converted, convert the Roth back to an ordinary IRA. The IRS allows reconversion any time until after the due date of your 1998 tax return -- including extensions."

IT'S YOUR MONEY: With 2000 less than 12 months away, start comparing each month's bank, brokerage firm and credit-card statements with those of the month before. This alerts you to possible computer malfunctions that could inadvertently delete money, stocks, mutual funds or bonds from your accounts if the pertinent computer programs aren't fixed. Continue this procedure through this year and well into 2000.

KIDDIE CORNER: Should you give children an allowance? "There's no substitute for hands-on experience with managing money," says Kiplinger's Personal Finance Magazine, February. "Kids will spend unlimited amounts of cash as long as it's yours. Giving them a fixed income of their own is a check on their impulse to spend -- as long as you don't make up any shortfall."

LOOKING AHEAD: "I'm looking for a year-end 11,000 on the Dow. Any correction will be an opportunity to buy." (Elaine Garzarelli, money manager.)

"Stocks now carry a near-term risk. Profit-taking may become more general in the first months of 1999." (Gerald Appel's Forecast.)

"Internet stocks and the Nasdaq 100 are in a 'bubble' mania. We might see a major top early this year." (Yankee Prognostics.)

"The Dow will hit 10,000 in 1999, even if the Fed doesn't cut interest rates again." (Robert Markmam, money manager.)

"Secondary stocks will soon surprise us on the upside. That does not suggest the leadership 'torch' will be passed from big to small." (Institutional View.)

"It has certainly not paid to quarrel with the bulls." (Marc Pado's Perceptions.)

Pub Date: 1/08/99

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