Broker Check

Traditional IRA

| January 18, 2019
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Traditional IRA Contributions

You can still make a 2018 contribution to your existing Traditional IRA account or start a new IRA before your 2018 tax filing date.

You must have had income in 2018 and be under 70 ½ years old to contribute up to the limit of $5,500.00 or if you are over age 50 the limit is $6,500.00.

Why have a Traditional IRA or a ROTH IRA? With the traditional IRA you can reduce your earned income dollar for dollar that you contribute, and the account grows Income Tax differed. With a ROTH IRA you contribute after tax dollars and the account grows income tax free. Your choice depends on your view of the tax rate now and in the future.

Retirement income will be more important in future years then it has been in the past. In the 1960’s most major employers had a pension plan that provided a fixed income for life when you retired after 30 plus years and age 62+. Yes, there were draw backs to a fixed pension, you had to stay at one company since the pensions did not transfer company to company. You had to reach retirement age to receive the benefit.

Now major employers have 401k’s that you contribute to with some offering a percentage match. You can take your 401k with you when you change employers which is better then the fixed pension, however, many times individuals withdraw funds from their 401k to make ends meet during layoffs or job changes.

You need to save for your retirement years now not later. Time is your friend or your worst enemy. The earlier you start the longer your funds have to grow. The real issue is to start an IRA Retirement account and contribute every month year after year. Most individuals when they retire tell us they did not start saving for retirement early and did not save enough.

Please call our office to start a new IRA or contribute for 2018 to your existing account or to increase the systematic program you have so you contribute more in 2019.

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