I am 61. I started a Roth IRA in 1998 and made contributions in 1999. Can I withdraw the entire amount tax-free or did the 1999 contributions start a new five-year test? --J.W.M., Flower Mound, Tex.
You can withdraw the total of your Roth contributions tax- and penalty-free at any time. The five-year rule comes into play for determining when you can get at earnings tax-free. The five-year clock starts ticking on January 1 of the year you open your account; it does not restart with each contribution. So, because you opened your account in 1998, your hands-off period ended December 31, 2002. In addition to passing the five-year test, to get at earnings tax-free a Roth owner must generally be over age 59½ or tapping earnings for the purchase of a first home. You're home-free.
Someone else's savings bonds
I found some savings bonds among things I bought at an auction. The U.S. Treasury's Web site indicates I can't cash the bonds because my name does not appear on them. The Treasury suggests that I send in the bonds and it will hold them pending a claim from the legal owner. Would I have a right to the money if no claim were made within a certain time? --A.R.M., Memphis, Tenn.
You'll never be able to cash the bonds. "If you are not named on the bond or are not the heir, you have no entitlement to the bond under any circumstances," says Stephen Meyerhardt, spokesman for the Bureau of the Public Debt. Before you turn the stash over to the government, you might want to try to track down the owner, or his or her heirs. They may be happy to give you a reward for reuniting them with their money.
People who have lost savings bonds or think they may be heir to a stack of misplaced bonds can file a claim at TreasuryDirect.gov, a Web site run by the Bureau of the Public Debt. The bureau will search its records to see if the bonds have been cashed. If they are still outstanding, the bureau will send you free replacements.
In search of a solo 401(k)
Where can I find a list of companies that offer individual 401(k)s? --James David Jones, Dahlonega, Ga.
Check out 401khelpcenter.com. You'll find contact information for nearly 90 mutual fund companies, brokerage firms, third-party benefits administrators and financial-planning firms that offer tax-favored retirement plans for self-employed people. You'll also find a wide range of investment choices and costs. For example, Fidelity's individual 401(k) gives you access to more than 4,500 mutual funds (1,100 without transaction fees), stocks, bonds and CDs. There's no setup fee, and you can avoid the $50 annual brokerage fee if your household has at least $30,000 in Fidelity accounts or if you sign up to receive all of your statements online. Benefit Plans Plus, a 401(k) administrator, will set up a plan you can use at any brokerage firm or mutual fund company if the fund or broker doesn't offer a solo 401(k) itself. BPP charges $375 up front, then $350 a year to administer the plan.
Individual 401(k)s allow self-employed people to save as much as $41,000 per year in pretax money (or $44,000 for those age 50 and older).
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