A Traditional IRA (Individual Retirement Account) allows you to defer income tax
on the money you set aside for retirement. This Individual account is separate
from your 401(k) at work. Your IRA account is NOT tied to your job, so you can
maintain the same IRA account throughout your career.
Here is how to maximize the value of your IRA account:
1)Maximize your tax deduction
You can put $5,500 into your IRA account each year and $6,500 if you are +50
The amount of income you make depends on the amount you may deduct
2) April 17,2018 is the deadline for your $5,500 2017 contribution.
Although as of 1/1/2018 you can make your 2018 IRA contribution any time during the year
The earlier you place $5,500 into your IRA the more time your money can grow & compound
3) Contribute to each spouses account
Married couples can contribute $11,000- $13,000(+50)– if only one spouse is working, the
working spouse can contribute to their account and into a separate IRA account for the
non-working spouse
4) How should I invest my IRA savings?
You can invest in individual stocks, mutual funds, bonds or ETF’s -exchange traded funds
You have many more choices than you do in your 401(k)
5) Even if you do not qualify for a tax deduction –
Your IRA is a great way to save for your retirement
You must have earned income from your job
You must be younger than than 79 ½
Single filers: you must make less than $62,000-$72,000 to take a tax deduction
Married filers: You must make less than $99,000-$119,000 to take a tax deduction
6) Consider the fantastic advantages of an IRA
Money grows without paying capital gains tax – a tax on the gain on your investments
Money grows without paying tax on the income generated by income or stock dividends
7) Minimize Fees
Choose Large & small company, US, European, Real Estate and a mix of bonds for your IRA
Choose no load or inexpensive mutual funds for your IRA Account
Choose an account with inexpensive stock trading fees
Choose an account such as a Schwab account, which does not have annual account fees
8) Consider a ROTH IRA – as the ROTH has more flexible rules
You do pay the tax up front for the ROTH IRA account
You do not receive a tax deduction
You do not have to pay any taxes when you take the funds out at the time of your retirement
You can take out funds after 5 years with out paying a 10% penalty, such as a 1st time home
buyer
Rush to make your IRA contribution this year and in every consecutive year. An IRA
account is one of the most powerful investment vehicles because of the tax-free
nature of this account; and the fact that your money compounds and grows over
time. We at Schenley Capital are available to guide you through the IRA process or
assist you with your IRA investments. There are many ways to invest your IRA to
maximize the value of your IRA for your future!