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3 Ways To Save For Retirement At Tax Time

By newadmin / Published on Monday, 12 Feb 2018 16:40 PM / No Comments / 6 views


Three-quarters of Americans said they think that contributing to or opening a traditional IRA after the end of the taxable year but before Tax Day is illegal, and only 7% of folks said they’ve made the tax-savvy move, in a recent online survey by Harris Poll on behalf of NerdWallet. It’s not illegal! It’s one of several tax-time savings strategies workers of all ages should consider.

“Many people don’t realize you still have time to reduce your 2017 tax bill,” says NerdWallet’s investing and tax specialist Andrea Coombes. “IRAs are a powerful tool to save for retirement.”

So, it comes as good news for first-time, last-minute savers, and for procrastinators:  You can still boost your retirement savings for 2017 and maybe lower your tax bill.

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“Between now and April, I’m going to be opening up a lot of IRAs for tax purposes,” says Michael Garcia, a wealth management advisor with Merrill Lynch in Dallas, Texas, who says he encourages clients to automate savings. “A lot of people look at this as a one-time opportunity: ‘I can open an account and save taxes this year;’ but the key is to make this an ongoing process. It’s got to be a mantra. You have to do it. You have to do it. And don’t forget to do it.”

Here are three savings strategies.

A traditional or Roth IRA. You have until April 17th to make a 2017 contribution. The limit is $5,550 a person—$6,500 if you’re 50 or older. If you’re not eligible for a retirement plan at work, or your earnings are modest, you may get a tax deduction for a traditional IRA. Otherwise, use a Roth, which grows tax free.

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Three-quarters of Americans said they think that contributing to or opening a traditional IRA after the end of the taxable year but before Tax Day is illegal, and only 7% of folks said they’ve made the tax-savvy move, in a recent online survey by Harris Poll on behalf of NerdWallet. It’s not illegal! It’s one of several tax-time savings strategies workers of all ages should consider.

“Many people don’t realize you still have time to reduce your 2017 tax bill,” says NerdWallet’s investing and tax specialist Andrea Coombes. “IRAs are a powerful tool to save for retirement.”

So, it comes as good news for first-time, last-minute savers, and for procrastinators:  You can still boost your retirement savings for 2017 and maybe lower your tax bill.

Shutterstock

“Between now and April, I’m going to be opening up a lot of IRAs for tax purposes,” says Michael Garcia, a wealth management advisor with Merrill Lynch in Dallas, Texas, who says he encourages clients to automate savings. “A lot of people look at this as a one-time opportunity: ‘I can open an account and save taxes this year;’ but the key is to make this an ongoing process. It’s got to be a mantra. You have to do it. You have to do it. And don’t forget to do it.”

Here are three savings strategies.

A traditional or Roth IRA. You have until April 17th to make a 2017 contribution. The limit is $5,550 a person—$6,500 if you’re 50 or older. If you’re not eligible for a retirement plan at work, or your earnings are modest, you may get a tax deduction for a traditional IRA. Otherwise, use a Roth, which grows tax free.

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