IRA Moves to Make




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Jun 01, 2022

By Ethan Howard, Investment Advisor Representative at World Trend Financial

These days we need to do all we can to boost our retirement savings, and tax breaks can help. To build your individual retirement account and maximize your potential savings, consider these IRA moves:

  • Ethan HowardOpen an IRA as soon as you can. The earlier you start, the longer your savings will compound tax deferred. Those extra early years of compounding can amount to a sizable sum of money come retirement age. Even teenagers or college students should consider saving some of their earnings in an IRA.
  • Avoid putting the wrong investments in an IRA. Never put tax-free investments, such as municipal bonds, in an IRA. You will end up paying ordinary income tax on money that would not have been taxed, or you will sacrifice earnings for a tax benefit you will never receive.
  • Do not forget about the catch-up contribution. If you are age 50 or older, you can contribute an extra $1,000 to your IRA. That is in addition to the regular $6,000 limit for 2022.
  • Review your IRA’s beneficiary. Your choice of beneficiary can affect how quickly IRA funds must be distributed. The longer money stays in the IRA, the longer it grows tax deferred. Consider reviewing your beneficiary once a year.
  • Consider having multiple beneficiaries for your IRA. Naming a contingent or backup beneficiary gives your heirs tax planning opportunities after you die.
  • Choose the right IRA for your situation. Decide whether a Roth IRA or a traditional IRA is best for your age and circumstances. You cannot deduct contributions to a Roth, but distributions are generally tax-free when you retire.

If you would like to discuss your specific financial situation, please feel free to reach out to Ethan at ehoward@tld-inc.com. You can also contact any of the investment advisor representatives at World Trend Financial in Cedar Rapids at 319-364-3041, or in Iowa City at 319-339-4884.



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