if someone under age 59 1/2 wants to take money out of a Traditional IRA, they would have to pay a 10 % penalty and taxes. But what if they converted the Traditional IRA to a Roth IRA first? (and they can maybe convert only the amount they need). Then – as I understand Roth IRAs – there is no 10% penalty to withdraw from a Roth. Is this true?
Also, Can you w/d from a Roth anytime without incurring or do you have to wait 5 years after conversion?

My consulting business did well enough this year that I had a bit of money due to the IRS. I planned on setting up an IRA this year since I’m in my mid-twenties. I like the tax-free potential of the Roth, but I also need to lower my AGI this year. Would it make sense to open and contribute a portion of my wages to a traditional account and deduct what I need to break even on taxes, and throw the rest into a Roth account? Not exceeding the $4,000 limit on contributions of course… The fees on the accounts should be negligable, considering that I’m working primarily with an Internet broker.
25% is my current tax bracket.

Aren’t they just paper losses? When the market recovers later on, won’t they recover their “paper losses” sometime in the future? I don’t understand this. Can someone please explain it to me. I figure it’s not a loss unless they cashed out of their programs and actually “realized” their losses.

My employer only allows 17% contrubition to 401K and they do not match anything right now (0%) so I will not reach the $15K limit. Anyway to help me get the max tax deferral of $15K?

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