Is a money market IRA considered a traditional or Roth IRA?
My guess is that you still have a Roth IRA. I’m unaware of anyone converting a Roth IRA into a Traditional IRA. It’s usually the opposite. You probably just switched investment vehicles within your existing Roth IRA. However, your statement for the account should state the designation of “Roth IRA,” so that should be easy to determine. Assuming you still have a Roth IRA, you can probably withdraw most of your money without triggering income taxes or an early withdrawal penalty. Why? Because your Roth IRA is funded with after-tax dollars. As a result, your original principal contributions can be withdrawn tax-free and penalty-free. It’s only the interest you earned on your principal which is subject to income taxes and a 10% early withdrawal penalty if withdrawn. For example, suppose you made the following contributions to your Roth IRA and invested the funds in a money market account: 2008 – $3,000 2007 – $2,000 2006 – $1,000 Let’s say that in 2009, the account is worth $6,500. Since y
