A lot of people are not putting enough away for retirement. Numerous studies bear this out. For example, 55% of Americans are behind on saving for their golden years, according to reporting from CNBC. A National Institutes of Health paper says research suggests between 20-67% of the older population may have under-saved for retirement. Yikes!
How can you avoid being in this unfortunate boat? Well, if you haven’t already started saving for retirement, do so today. It’s never too early. For many people, one of the best investment vehicles is an individual retirement account, or IRA.
IRAs have an advantage over other savings methods in that they are tax-free, up to a point.
For traditional IRAs, the tax savings are up-front – in other words, they are made with pre-tax dollars. For Roth IRAs, the tax savings come later because the contributions are made with after tax-dollars.
You’ll need to consult your financial advisor to decide which kind is right for you, but generally younger earners prefer Roth IRAs, betting they will be in a higher tax later in life.
For both traditional and Roth IRAs, individuals can contribute up to $6,500 in 2023. If you’re 50 or older, you can contribute an additional $1,000.
To reach your 2023 IRA limits, you can contribute to your IRA all the way up until the tax filing deadline for your 2023 taxes, which is Monday, April 15, 2024.
Do you have tax questions related to retirement savings or other financial decisions? We can help you evaluate your overall tax picture. To get started, call us at 706-632-7850 or email our office manager Kimberly Mortimer at kmortimer@premiertaxsuccess.com.