Get ready! Get set! Go! Before you know it, it will be your time to retire. Will you be ready? Do you know what the IRA contribution limit is?
Maximize your IRA:
To prepare the best you can, take full advantage of IRA’s. Every year you should max out your ira contribution limits if possible. This is especially true if you have a roth ira because at retirement your contribution ira limit will be tax free. Your roth ira withdrawals will be tax free if the account is held for 5 years and you are over age 59 ½.
IRA Contribution Limits:
The ira limit for 2009 is $5,000 with a catch up contribution of an additional $1,000 if you are 50 years old. These ira contribution limits are the same for roth and traditional iras.
401k to IRA rollover:
You can also make a contribution ira the same year that you make a 401k rollover to ira. So if you change jobs and want to rollover your 401k balance to an ira but stopped that process because you thought that would prohibit you from also making your contribution ira for that year – it’s okay – start the process again, you can do both.