How To Contribute To An IRA
IRAs are very popular retirement accounts allowing an individual to make tax-free contributions of up to $5000 per year. An additional benefit of the IRA is that you can lower the tax liability that you will have during tax season. Opening an IRA account is a great way to plan for your financial future and ensure that you are well prepared when time comes to live out those golden years.
The first step in contributing your money into a IRA account is to decide how you want to make those investments. There are many ways in which this can be done, including with the use of savings bonds and CDs, precious metals like gold and silver, stocks and annuities, and more. The various investments that are offered with the IRA have different degrees of risk as well as various return expectancies involved with them, so it is essential that you are aware of those before making your selection.
Next step that you must take is to open an IRA. Once you’ve determined the type of investment that you want to make you can better select what facility that you will use to open your account. IRAs are not available through your employer like a 401(k) plan, however, there are several options available for where you can make these investments, including through a bank or other financial institution or through a brokerage firm.
The next step is to write a check from your personal bank account. The check is the initial contribution and may not exceed current amounts allowed by the IRS. Currently this stands at $5000 per year.
Once this is done you must make regular contributions to the plan. Again, you can make contributions of up to $5000 per year, though the IRS does allow an extra $1000 to be contributed by those who are already past the age of 50 in order to help them catch up to the contribution amounts. It is best to start the IRA as early as possible to avoid the need to catch up.
An IRA is an excellent way to save for your retirement, and with this information you can easily open an account and get started without another moment of delay. It is well worth your time to look into the IRA and its enormous benefits to you. You will not find a better tool for investing in your retirement than the IRA!