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Armando Patino, LUTCF®, FSCP®
Financial Advisor
Prudential Advisors
1 Tower Center Blvd, 16th Floor
East Brunswick, NJ 08816
Phone: 908-368-1588
Cell: 201-290-1941
March/April 2025
IRA Mistakes You Can't Afford
With annual contributions limited by the IRS or your ability to save, your retirement security can't afford you to make missteps with your IRA. Yet many IRA investors do.
Younger people have many financial responsibilities: student loans, car loans, and the expenses of a first-time apartment or home. But that doesn't mean they should ignore saving for retirement. It may bring a modem of reassurance that while an IRA is not an emergency fund, you can access IRA money without tax or penalties for a financial emergency. Premature withdrawals aren't ideal for anyone, but they're generally better than not contributing to an IRA as early as possible.
Married couples with one earner can make annual contributions for a spouse who is not working. As long as the earning spouse has enough earned income to equal the contributions, each spouse may invest up to the annual contribution limit set by the IRS each year, but there are limitations you need to know about.
Tax-sensitive procrastinators may make IRA contributions until the April 15, 2025, tax filing deadline. However, remember that last minute contributions give your investments less time to compound, and you potentially have less money for retirement. If you can't contribute all at once at the beginning of the year for optimal compounding, use a monthly contribution strategy to contribute the most you can, the earliest you can. It makes a big difference over the years.
Like the Roth IRA, traditional IRA contributions are allowable for people of any age. So, as long as you have earned income and can afford to contribute to an IRA, you have options.
Remember that, unlike traditional IRAs, Roth IRAs do not require minimum distributions, and contributions are not tax deductible.
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