As a personal retirement savings plan, your individual retirement account (IRA) offers specific tax benefits. Deductible contributions to a traditional IRA (keep reading for more information about traditional vs. Roth IRAs) can reduce your taxable income. If you haven’t already contributed up to the maximum amount allowed, consider doing so.
Even if you’re close to filing your returns, talk with your financial professional about adding your contribution.
Your IRA and 401(k)
When you participate in a 401(k) at work, in most cases, you can still invest in an IRA. By doing both, you can help boost your savings for the future and reduce your taxable income.
There are, however, contribution limits, so talk with your financial professional about how you might want to divvy up money into each plan.
Traditional vs. Roth IRAs and taxes
When it comes to IRAs and tax planning, talk with your financial professional about whether a Traditional IRA or a Roth IRA may be better for your tax situation and long-term financial goals.
With a Traditional IRA, the money you contribute gives you an up-front tax deduction, deferring your taxes when you withdraw money in retirement (when, theoretically, your taxes would be lower anyway).
A Roth IRA contribution doesn’t provide a tax benefit now, but your distributions when you take them later are tax-free.
There are details and considerations that will impact your financial plan with either choice, so talk with your financial professional about your next steps.
Reach out to David Weis, our knowledgeable Financial Advisor available through broker-dealer CUSO Financial Services, LP (CFS)*. Schedule a no-cost, no-obligation appointment with him today to talk about your insurance needs. Call him today at 314.919.1058.
Visit David’s website
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA / SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
