On April 15th, the window for prior year IRA contributions will close for good. Have you already maxed out your 2014 Traditional or Roth IRA with $5,500? (or $6,500 for those 50 and over.) Or, are you receiving a tax refund and wondering how to invest it? Here at FutureAdvisor, we have your back. Retirement planning is surprisingly similar to kids’ books: you have to choose your own adventure. Here are the choices:
- You have already maxed your 2014 IRA: Nice work! Now read this article on why maxing out your 2015 IRA is smart.
- You think Ira is one of your grandmother’s cribbage friends: No problem! Here’s an introduction to IRAs.
- You have an IRA, but are unsure how to contribute: No worries! Adding funds to an existing IRA is usually pretty easy. Simply transfer the funds electronically from your checking or savings account. Just be sure to invest them in diversified, low-cost ETFs. We can help with that, too. :)
- Confused about Roth vs. Traditional: Yep, that’s a common one. If you’re young and plan on earning a lot of money later in life, Roth is probably the better choice. More on that here.
- You earn so much, you’re above the income limit to contribute to a Roth IRA: Congratulations, now you have to use the backdoor. This one gets a little tricky, so really make sure you do your homework.
IRA eligibility varies depending on your income, age and 401(k) coverage. Use this handy IRS summary to see if you qualify. If you’re already a FutureAdvisor Premium client, simply add the funds to your Fidelity or TD Ameritrade IRA account — and we’ll do the rest!
Happy saving!
The views discussed above should not be interpreted as tax advice and it does not represent in any manner that the tax consequences detailed will be obtained. Clients should consult with their personal tax advisors regarding the tax consequences of investing.
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