Still Time to Open and Fund Your IRA Before April 15th
Deadlines for Contributing to Your IRA
Tax day, April 15, is fast approaching and I know some people are still working on getting their taxes done. The good news is that waiting a bit later to do your taxes gives you some extra time to open and fund your individual retirement account, whether it’s a traditional or Roth.
I thought it would be a great time to share an older post with some updated reminders for this tax season.
Still time to open and/or make your IRA contributions for 2009!
What is the difference between a Roth IRA and a Traditional IRA?
Roth IRA – contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free.
Traditional IRA – contributions are often tax-deductible (often simplified as “money is deposited before tax” or “contributions are made with pre-tax assets”), all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income.
I’m using Sharebuilder for my Roth IRA and have been happy with it for the last couple of years. Remember, you can make 2009 contributions all the way up to when you file your taxes or April 15, 2010, whichever comes first. Please talk to your broker to make sure that the money will be deposited before the April 15th deadline.
How Should I Direct My Retirement Contributions for 2010?
It’s not too early to work on your 2010 contributions. You may even want to use your tax refund to put a chunk down in your IRA. Some financial gurus, like Dave Ramsey, encourage the following process to maximize your retirement contributions.
It’s a great place to start if you’re looking at where to allocate your money. My husband and I try to automate our contributions to keep ourselves on track.
I did not fully fund my IRA for 2009, but I was happy to still contribute to it while working on my other financial goals and improving our cash flow. My focus this year will be increasing my 2010 Roth IRA contributions.
How are you going with your taxes? Did you max out your 2009 IRA contributions?
Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..