As they say, the best time to start saving for retirement is yesterday. So there’s no time to waste in making your IRA deposits for the year!
With some volatility in the stock market, you may be considering whether an Individual Retirement Account is a good fit for your retirement savings.
Here’s what you should know about IRAs…
There are contribution limits
For 2019 and 2020, your total contributions to all of your Traditional and Roth IRA accounts can’t be more than:
- $6,000 ($7,000 if you’re age 50 or older), or
- your taxable compensation for the year, if your compensation was less than this dollar limit.
If you’re 50 or older, you’re also eligible for catch-up contributions. You can add $1,000 annually to the $6,000 maximum regular IRA contribution if you need to get back on track with your retirement savings.
See more information about IRA contribution limits here.
You can contribute to an IRA even if you participate in your employer’s retirement plan
You can invest in a Traditional or Roth IRA in addition to your employer-sponsored retirement plan, including a SEP or SIMPLE IRA plan.
But do note that if you contribute to both an IRA and employer plan and your income exceeds certain levels, you may not be able to deduct your entire contribution. (Read more about IRA deduction limits here.)
If married, you and your spouse can both own IRAs
If you file a joint return and have taxable compensation, you and your spouse can each contribute to your separate IRAs.
Current generational trends
According to the Illinois Bankers Association, we’re seeing unique generational trends across the country when it comes to retirement savings activities.
- Baby Boomers are starting to roll their savings from employer retirement plans into IRAs so they have direct control over how their money is invested. They are spending a lot of time planning how to use their money and how to provide for their future beneficiaries.
- Gen X is becoming more focused on accelerating their savings plans now that their kids are going off to college or have left the nest. Many in the Gen X camp are also playing catch-up after falling behind on retirement savings due to delegating their income to immediate needs like mortgages and college savings.
- Many millennials have started retirement savings through employer-sponsored plans, but since employment changes are often a factor with this age group, many are turning to IRAs through job transitions.
INB has the scoop on IRAs
Whether you’re 18 or 62, INB offers Individual Retirement Account options for all walks of life.
- A Money Market IRA is the most basic of the accounts and offers the most flexibility of our offerings. After a small opening deposit, you can contribute money at any time.
- The Structured Savings IRA is retirement savings made easy. You bring us $50 and tell us how much you want to add each month and we will automatically transfer it from your INB account.
- INB also offers Certificates of Deposit, or CDs as an IRA option. A range of options are available, from a six-month maturity through a five-year maturity.
To learn more about IRAs, call 877-771-2316 and ask for me Kelly Raison. While I work at our Chatham location, you can stop by any branch, and we’ll help you make plans for a better retirement.