How and Why you should make an IRA contribution before April 18th.
Roth and Traditional IRAs are some of the most used types of IRAs. If you thought about opening one of these in 2015 you probably already know the basics, but here they are again:
- The annual contribution limit for 2015 was $5,500
- You had to have not reached your 70 ½ birthday before the end of the year if you were leaning towards a traditional IRA
- If you are over age 50, you get to contribute an additional $1,000
- You or even just your spouse needed to have wages or self-employment income
- Your Traditional IRA contributions may be tax-deductible. Deductions may be limited if you or your spouse is covered by a retirement plan at work and income exceeds a certain level
- Roth contributions are limited based on your filing status and income
Perhaps 2015 slipped by and you never got the opportunity to make that IRA contribution. No worries, it’s not too late!
How can you still make a 2015 Traditional or Roth IRA Contribution?
Set up your IRA account and make your 2015 IRA contribution by April 18, 2016.
Setting up your IRA is as easy as going to your local bank, for most people it’s probably even easier to set up online. Most financial institutions can help you set up the account. Important things to consider when deciding on which institution to use are their investment options and what fees they charge.
If you want the contribution to be for 2015, ensure that it is made “on account of’ 2015.”
File your taxes early, claim the IRA contribution deduction, and use your tax refund to fund your 2015 IRA contribution by April 18th.
Why make an IRA contribution?
- Because you can, of course! If you are eligible, each year you don’t contribute is a lost retirement savings opportunity.
- You are fully vested. There is no gradual schedule of vesting, the growth on your investment is 100% yours.
- Although the timing of your tax savings may vary, it will offer a tax savings opportunity.
- You have complete control over your investments.
Give us a call at 203.438.0161 or email us and we would be happy to answer any questions you many have!