Planning For Retirement
Four tips for tapping into your IRA’s full potential
Date:01 April, 2016
Make your annual investment early in the year and let compounding work for you.
To make the most of your IRA, you should invest the maximum amount allowable as early in the year as you can. An investment every January 1st, rather than waiting until December 31st, can substantially better your results.
Note: Market rates at any given institution may be substantially lower than the examples cited from this outside source; this example is for illustrative purposes only. .
Take advantage of the time extension. Even if you’re unable to make a contribution one year, or early in the current year, under IRS rules, you have up until tax day to contribute to your IRA for the current calendar year. That means you can still make contributions for 2015 until April 18, 2016, which is the tax deadline. (not a misprint, April 18th is the correct deadline for filing of 2015 tax returns)
Contribute your tax refund. If you’re receiving a tax refund, consider using it to make a 2015 IRA contribution. The IRS even makes it easy by allowing you to have some or all of your tax refund sent directly to your IRA custodian. Just be sure you make the contribution by April 18!
Over 50? Make a “catch up” contribution. For 2015 and 2016, the annual contribution limit is $5,500 for individuals under age 50. However, if you’re 50 years of age or older, you’re allowed to make a “catch up” contribution of an additional $1,000, for a total of $6,500 per person.
If you are interested in opening an IRA account or learning more ways to tap into your IRA’s full potential, contact us at 800-467-7216.