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IRAs - and We Do Mean Individual Retirement Accounts
Posted Wednesday, March 7, 2012
If you have the means and have not do so, I would like to remind you that you can still make IRA contributions to you IRA [Roth or Traditional] for 2011 up to April 17, 2012. These personally owned and controlled retirement accounts are a great way to build up extra funds for the retirement years.
How much can I contribute, you ask. For both 2011 and 2012, you can contribute $5,000 [those over age 50 can also contribute a 'catchup' amount of $1000, for a total of $6000]. Your IRA contribution generally cannot exceed your Earned Income, although exceptions apply for spouses.
What is the difference between a ROTH and a Traditional IRA? - A Roth IRA is put away with 'after tax' dollars - not a deduction on the current tax return, but will not be taxable when you take it out after age 59 1/2. A Traditional IRA may or may not be deductible- there is a calculation needed, but will be taxable in whole or part when withdrawn. There are limits on the type of IRA based your income.
Does a ROTH or Traditional IRA work better for you? There are some calculations that we recommend to determine which is better, and those need more time and space than I have at this moment. Sign up for our site or email us with a question. I will respond on the Blog if there is enough interest. Or go to www.irs.gov
How much can I contribute, you ask. For both 2011 and 2012, you can contribute $5,000 [those over age 50 can also contribute a 'catchup' amount of $1000, for a total of $6000]. Your IRA contribution generally cannot exceed your Earned Income, although exceptions apply for spouses.
What is the difference between a ROTH and a Traditional IRA? - A Roth IRA is put away with 'after tax' dollars - not a deduction on the current tax return, but will not be taxable when you take it out after age 59 1/2. A Traditional IRA may or may not be deductible- there is a calculation needed, but will be taxable in whole or part when withdrawn. There are limits on the type of IRA based your income.
Does a ROTH or Traditional IRA work better for you? There are some calculations that we recommend to determine which is better, and those need more time and space than I have at this moment. Sign up for our site or email us with a question. I will respond on the Blog if there is enough interest. Or go to www.irs.gov