The Traditional IRA.  An IRA stands for an Individual Retirement account.  

You can open an IRA at a bank or financial institution.  

When you contribute to a Traditional IRA, you have the potential to lower your taxable income, in turn reducing your tax bill.  So, if you owe taxes at tax time, and want to possibly reduce that amount, contributing to an IRA may help!  

The maximum contribution for 2020 is $6,000 if you are under 50 years old, and $7,000 if you are 50 years or older.   You can open an IRA with as little as $50 a month.

Contributions can be made for the previous year until April 15th of the following year.  That means you have until April 15th of 2020 to contribute for 2019.

In order to be able to contribute to a Traditional IRA you must have earned income, or a spouse with earned income who can contribute on your behalf.

An IRA is simply an account title.  It’s the investments you choose for your account that will determine whether the account increases or decreases in value.  Common types of investments for IRA’s include, stocks, bonds, mutual funds, and money market instruments. Your account will not be taxed as it earns money, however, withdrawals in retirement are taxable.

New laws allow you to contribute to your IRA until age 72, and then you must begin to take withdrawals based on your estimated life span.

If you take a withdrawal prior to age 59 ½ from an IRA for reasons that don’t qualify, you will penalized.  There are exceptions to these penalties such as disability, a first time home purchase, and medical expenses.

To find out if a traditional ira makes sense for you, or if you have an ira that you would like me to go over with you, please don’t hesitate to reach out!  It’s important to understand the fees you are paying, and to make sure your investments are suitable for your time horizon to retirement, and how much risk you are willing to take.  I find that many of my clients come to me with a limited understanding of what they currently have, and that’s ok! I’m happy to explain!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.