Morton S. Winer, CPA

 

9933 North Lawler Avenue, Suite 410

Skokie, IL 60077

 

Phone: 847-676-8900

 

Website: www.msw-cpa.com

July 2024

IRA Missteps You Can't Afford

IRA Missteps You Cant Afford

With annual 2024 contributions limited to $7,000 ($8,000 for those age 50 and older), your retirement security can’t afford you making mistakes with your IRA. Yet many IRA investors do.


Younger people have many financial buckets to juggle: student loans, car loans, and the expenses of a first-time apartment or home. That doesn’t mean you should ignore saving for retirement. It may bring a modem of reassurance to know that while an IRA is not an emergency fund, you may be able to access IRA money without tax or penalties for a financial emergency. Premature withdrawals aren’t ideal for anyone, but they’re generally better than not contributing to an IRA as early as possible.


Married couples with one earner may forget that they can make annual contributions on behalf of a spouse who is not working. As long as the earning spouse has enough earned income to equal the contributions, each spouse may contribute up to $7,000 ($8,000 for ages 50 and older) to an IRA for the 2024 tax year.


Tax-sensitive procrastinators may make IRA contributions until the April 15, 2025 tax filing deadline. However, keep in mind that last-minute contributions give your investments less time to compound, and you potentially have less money for retirement. If you can’t make your contribution all at once at the beginning of the year for optimal compounding, use a monthly contribution strategy to contribute the most you can, the earliest you can. It makes a big difference over the years.


Older IRA owners no longer have to end contributions to traditional IRAs at age 70 1/2, thanks to the Secure Act. Like the Roth IRA, contributions are allowable for people of any age. So as long as you have earned income and can afford to contribute to an IRA you have options. Remember that a Roth IRA has no required minimum distributions and contributions are not tax deductible, unlike traditional IRAs.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.