As tax season approaches, don’t overlook the opportunity to make your 2024 IRA contribution before the April deadline. It’s a smart way to build your retirement savings and secure your financial future. Up the ante: consider doubling down by making both your 2024 and 2025 IRA contributions.
Why Contribute Early?
The Internal Revenue Code (IRC) allows contributions to Traditional and Roth IRAs until the tax filing deadline (April 15, 2025) for the 2024 tax year. However, waiting until the last minute means missing out on up to 16 extra months of potential growth. Making both last year’s and this year’s contributions early gives your money more time to grow.
You can contribute up to $7,000 ($8,000 if you’re 50 or older) to your IRA in 2024 and 2025. By doubling down, you can make a $14,000 or $16,000 contribution for both years. If you’re married filing jointly and your modified adjusted gross income (MAGI) is at least $28,000 or $32,000, you both can double down and contribute up to the maximum.
The Benefits of Making an IRA Contribution
- Tax Savings – Contributions to a Traditional IRA may be tax-deductible, lowering your taxable income. Also, if your income tax is lower in retirement, you’ll owe less on your taxable distributions.
- Tax-Free Distributions – A Roth IRA grows tax-advantaged, meaning you’ll enjoy tax-free distributions of earnings in retirement if you are at least age 59 ½ and opened a Roth IRA more than 5 years ago.
- Time in the Market Matters – The earlier you invest, the more time your contributions and any earnings have to grow.
Don’t Wait—Act Now
Making your IRA contribution today means securing your retirement future and you could reduce your tax burden before it’s too late. Consult with a financial advisor to determine if a Roth or Traditional IRA is right for you.
Don’t rely on luck, take control of your financial future—make your 2024 IRA contribution before the deadline, and start early by contributing now for 2025!