Just two more business days to make a 2007 IRA contribution!
If you are working with a Waddell & Reed financial advisor, you can make a contribution it your check is dated on or before the 15th but received and processed by the 21st.
In many cases, a full contribution to a deductible Traditional IRA–$4000.00 for under 50/$5000.00 for 50+–can help move you into a lower tax bracket. To find out how contributing to either a Traditional IRA or Roth IRA can help your retirement outlook, fell free to contact me or any other financial advisor for professional advice.
A thought – If one is so close to the bracket line, say 15%/25%, and they are finishing their return, they migh deposit the exact amount to offset their 25% taxed money, and the rest as Roth deposit. Over time, this approach will minimize their taxes, and provide the opportunity to convert from IRA to Roth in a lower income year. This takes only a bit of extra effort each year, as it’s even simpler than my post suggests.
Joe
Comment by joetaxpayerblog — April 14, 2008 @ 2:08 pm
Excellent idea. Thank you for that. Planning for tax-advantaged withdrawal of retirement funds is a large part of the financial planning process. The Roth IRA is certainly a great tool for offsetting future taxes–especially if you think that tax rates may be higher in the future.
Comment by gsmorse — April 14, 2008 @ 6:12 pm
Waddell & Reed is a great company, call your local office today.
Comment by Roth IRA — April 21, 2008 @ 12:03 pm