Ever thought about how cool time travel would be? You could go back and right wrongs and take care of all the things you should have done. Well, as we all know, time travel does not exist, but you can travel back at least one year with an Individual Retirement Account. You have until April 15th to do something you told yourself you would do last year — open and/or contribute to an IRA.
So while you may feel like you are five years too late in starting your retirement saving, you’ve been given a chance to not make it 6 years too late by still having time to open and fully fund an IRA for 2019 in 2020 as long as you do it before April 15th.
Now that you’ve decided to take advantage of this unique time travel opportunity, you’ll need to decide on the type of IRA you want. Do you want a Roth or Traditional IRA. Here’s a quick side by side just to whet your appetite:
| Traditional IRA | Roth IRA |
| Contributions may be tax deductible | Pay taxes on contributions |
| Withdrawals are taxed as income | Withdrawals are tax free |
| No income limits to make contributions | Income limits to make contributions |
| Required minimum distributions at 70 1/2 | No required distributions |
Please research or consult with professionals to determine which option works best for you. For example, we can’t provide you with any tax advice and if that is one of your main decision drivers, you’ll need to ask a tax professional.
Once you’ve decided on the type of IRA that’s best for you, you’ll have to decide on your risk tolerance and overall strategy. Are you early career and looking for substantial growth or are you mid to late career and looking to protect the saving you’ve already built up? Again, if you wish to tie your IRA to the stock market, you’ll need to consult with a professional. If you are looking for a safe, guaranteed place to grow your IRA, we’ve got good options for you, especially with our Premium Market IRA.
Since you are reading this, you are at least showing interest in IRAs so now I encourage you to do your own research and take action.
Post author: Jamieson Mackay, CCUFC
The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.