If you’re using an IRA to save for retirement, your goal is to get the most from your investment while avoiding certain taxes and penalties. The First has put together a check list of things you can do now and in the future to make sure your Individual Retirement Account is working for you.
Tips, Rules and Regulations to Remember:
- Make contributions early. If you’re under the age of 50, you can contribute up to $5,500 to your IRA. If possible, make this contribution as a lump sum in January so your money will earn more interest. You have until April 15th of 2015 to make contributions to your IRA for 2014, but it definitely pays to make your contributions as early in the year as possible. If you do choose to make a contribution for 2014 in 2015, make sure you specify which year you want the contribution to apply to.
- If you’re age 50 or older, you have the option of “playing catch-up” by contributing an extra $1000 per year to your IRA. This is a good idea for people who got a late start saving for retirement.
- Remember to take your distributions! You can begin withdrawing funds from your IRA at age 59½ without any penalties, but you MUST start taking your distributions by age 70½. Missing a distribution results in a 50 percent tax on the amount you were supposed to withdraw.
- Check your beneficiary. Make sure that the person named as your IRA’s beneficiary in the event of your death is still appropriate. This is especially important if you were recently married, divorced or if your spouse has passed away.
- If you expect to get a tax refund, consider having it paid directly to your IRA.
- If you want to convert your Traditional IRA to a Roth IRA, the deadline is December 31st, and certain qualifications must be met.
Talk to The First about opening an IRA. Visit http://www.fnbn.com/savings/individual-retirement-iras
Understanding the basics about your IRA can help ensure a much more comfortable retirement. Did we leave anything out? Let us know in the Comment section below.