Never too early to plan future with Individual Retirement Account!

Credit Cards
Credit Score
CD and Savings

IRA Contribution Rules

An individual retirement account, or IRA for short, can be an effective retirement tool in addition to your 401k plan. It provides tax-deferred growth and a wide range of investment options, including stocks, bonds, annuities and mutual funds. It is an excellent way to fatten your savings!
There are three basic types of retirement accounts to which you can make annual contributions: deductible IRAs, traditional nondeductible IRAs and nondeductible Roth IRAs. You need to meet several qualification rules to deposit your money. The requirements are different for each type of IRA.

Contrary to most tax plans available online and offline, individual retirement accounts provide an opportunity to make prior year contributions until April, the 15th. In order to be eligible for deposits, you need to meet the following requirements. Firstly, your income should be at least the amount of the contributions you want to make. Secondly, you should be under 70 1/2 years old (it is necessary only for traditional IRAs).
No matter what type of retirement accounts you selected, the Federal government imposes annual contribution limits.

They apply to both Roth and traditional IRAs. In 2008, the maximum amount people may deposit is $5,000 per person. In 2009, the contribution limit will raise in $500 increments based on the level of inflation.
If you want to maximize your financial benefits, make sure that your IRA contributions are posted to the right type of account, and that all transactions are made correctly. It is always easier to correct an error if you catch it immediately.

One of the most common mistakes that people make is posting a contribution for the wrong tax year. It typically happens when you deposit money at the beginning of the year and don't write tax year on the check. Custodians consider unmarked contributions as "current year." That may not be what you wanted. In order to avoid this potential error, you must clearly indicate the tax year to which the contribution applies. Write all necessary information on the check or leave instructions when you transfer funds from a non-retirement online account.

Related Tips
What If Your Credit Is Damaged By Natural Disaster?
How to Qualify for a Credit Card after Bankruptcy
Balance Transfer: Cards That Fit and Benefit
To Sign or not to Sign the Back of Your Credit Cards?
Find Deposit in Your State

Term and Tier

find a deposit
Enter Your ZIP code

Ask a Question
Your Name: *
Your Email: *
Your Question: *
Enter Number from Picture: *

* - Required Fields
Copyright © 2007-2018. All Rights Reserved.
Disclosure: Not an access card.