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Last Chance IRA

posted on Thursday, February 22, 2018

Last Chance to Contribute to Your IRA for Tax Year 2017

OJ Slavish | VP – Financial Planning | February 1st, 2018

Tax day will be here before you know it, and many of us are scrambling to get the last of our tax documents in order. There is still time left to make a last-minute contribution to your IRA for tax year 2017. This year, contributions must be made by Sunday, April 15th. IRAs are a powerful element of your retirement strategy and your contributions add up over time. Before we hit the deadline, make sure you’re familiar with this tax year’s contribution limits.

2017 Contributions

IRA contribution limits change every year or every few years to stay in line with the cost of living. Since inflation has been low, the 2017 limits are $5,500.

Remember, this limit applies to all of your Roth and traditional IRAs — not per IRA account.

Catch-Up Contributions      

If you are age 50 or older, you can contribute an additional $1,000 to your IRA accounts, allowing you to contribute up to $6,500 for the year. The catch-up contribution is designed to help those closer to retirement age maximize their savings for retirement.

Roth IRA Limits and Backdoor Options

While the maximum contribution for IRAs is $5,500 per year (or $6,500 if you are older than 50), Roth IRA contributions are phased out for those with high modified adjusted gross income. For single filers in 2016, the income phase out threshold begins at $120,000 and ends at $135,000. Within this range, you can only make a partial contribution and once you hit $135,000, you cannot make a Roth IRA contribution. For married filers in 2016, the income threshold starts at $189,000 and ends at $199,000.

If your income is above the cutoff amounts, there are still a few ways you can contribute to a Roth IRA. One option is a backdoor Roth transaction. You first contribute to a Traditional nondeductible IRA, which is available regardless of income, and then convert it to a Roth IRA. The IRS also allows you to convert after-tax contributions to a 401(k) into a Roth IRA.

At Midwest Heritage Financial Services, we are happy to help answer your IRA questions and offer advice on how to make the most of your retirement savings vehicles.  If you have an old 401(k) that you’re looking into rolling into an IRA, give us a call at 515-343-5890 and I can help you decide the best move for you.

Get Started Today.

Registered representatives offer securities through Securities America, Inc., Member FINRA/SIPC. Financial advisors offer financial planning and advisory services through Securities America Advisors, Inc., and SEC Registered Investment Advisory Firm. Hy-Vee, Midwest Heritage Financial Services, and the Securities America companies are independent entities. Securities America and its representatives do not provide tax or legal advice: therefore it is important to coordinate with your tax or legal advisor regarding your specific situation.

These services offered at our EP True Parkway and Chariton locations. Appointments at other branches available upon request.