WAXAHACHIE, TX — Many people set goals to save more money to support a comfortable retirement. Even if your retirement seems well into the future, there can be some instant gratification. By opening an Individual Retirement Account (IRA) before April 18, 2011, you may be able to take advantage of some potential tax benefits on your 2010 tax return.
For the 2011 tax year, individuals can make annual contributions to a traditional or Roth IRA of up to $5,000 or 100 percent of earned income, whichever is less. Married couples filing jointly can contribute up to $10,000 ($5,000 per IRA) provided either spouse has earned income of at least that amount. As an added benefit, individuals age 50 or older are eligible to take advantage of a catch-up provision and contribute an additional $1,000 to an IRA.
Customers can set up an IRA with a minimal initial contribution. By continuing to add to that on a monthly basis or when their finances allow, the account has the potential to grow on a tax-deferred basis and becomes a great resource to help save for the future and provide the comfortable retirement they desire.
There are several products that can be used as an IRA funding vehicle. Depending on factors such as your time horizon, risk tolerance and other financial goals, some products may be more suitable than others. Contact a professional to help assess your financial situation and determine what type of IRA or funding vehicle may best meet your needs.
An IRA can become a crucial part of your personal retirement savings program. The sooner you begin, the more time you have to take advantage of the benefits an IRA provides. The time to establish an IRA has never been better.
Written by Adam Rope, State Farm agent based in Waxahachie.