There’s Still Time to Contribute to your Roth IRA!

January 27, 2011

Have you made your 2010 Roth IRA contribution?

If you have not yet made the maximum contribution, and are eligible to make contributions, you still have time!

Tax payers have until April 18^th of 2011 to make their Roth contributions for the 2010 tax year. If you are within the income limitations to make contributions, a Roth IRA is an excellent investment account as investment growth is tax deferred and withdrawals in retirement can be tax free.

For 2010, single filers are able to fund their Roth IRAs with 100% of the contribution limits if their income is below $105,000. Their amount of contribution availability drops if they are above the $105,000 and are phased out completely at $120,000. For Married Filing Joint taxpayers, income restraints begin at $166,000 and end at $176,000.

Looking forward for 2011 contributions, contribution limits for this year have stayed the same as 2010. This includes the limits for the Roth and Traditional IRAs and the majority of employer sponsored plans such as 401ks and 403bs. A very good practice is to contribute enough of your salary to receive at least the employer match. Also, pay raises often present an easy opportunity to increase your deferral, while reducing your adjusted gross income.

The contribution limits for nearly all types of retirement plans are listed in the following chart:

Qualified Plans	2010	2011
401k, Roth 401k, and 403b plans	$16,500	$16,500
Catch-up for ages 50 & over	$5,500	$5,500
457 Plans of tax exempt employers	$16,500	$16,500
Catch-up for ages 50 & over	$5,500	$5,500
SIMPLE IRA or SIMPLE 401k plans	$11,500	$11,500
Catch-up for ages 50 & over	$2,500	$2,500
Limits on annual additions to SEP Plans	$49,000	$49,000
Traditional and Roth IRAs	$5000	$5000
Catch-up for ages 50 & over	$1000	$1000

Our continuous service monitors your income and determines every year how much you should be contributing to each of these investment accounts. It also reviews your income tax and estate picture, which may provide opportunities for tax savings. If you are interested in this service, please contact us.

Photo credit: Scott Willis.

Heather Gudac

Heather is our Chief Operating Officer and partner with the firm. Heather is responsible for overseeing operations across our firm to enhance the quality of our client relationships. She began her career with Financial Symmetry in 2006 as an intern and became a shareholder in 2013.