By J.P. Dahdah, Founder & CEO of Vantage
All financial institutions and trusted advisors will be encouraging you to focus on one thing in April, taxes. Vantage is no different, but we do have a small spin on the message. Typically, the spotlight is placed on tax minimizing strategies, such as contributing to your IRA before April 17th. Sure, contributing the maximum amount to your IRA ($5,000) for 2011 makes financial sense, but why?
There are two reasons: 1) you must accumulate money annually to accomplish your retirement goals, and 2) decreasing your income tax liability ensures that you keep more of your income and give less to Uncle Sam. By making an IRA contribution, you accomplish both objectives. For the purposes of my article, I want to focus on the second benefit. The actual monetary savings of making a $5,000 IRA contribution is at least $1,250. That is assuming that you are in the 25% tax bracket. If you are in the 35% tax bracket, you save $1,750 dollar for dollar. That is real money folks! If you are married and able to make a contribution to both your IRA and your spouse’s, you can multiply that savings by two… That’s at least a $2,500 tax savings per household. Now remember, to take advantage of these amazing savings, you must take action and cut a check payable to your Vantage IRA by April 17th, 2012. If you can’t think of a useful way to use $1,250 of savings, I am sure Uncle Sam can, so don’t procrastinate. To make your 2011 IRA contribution, please complete and submit the Deposit Coupon along with your contribution check to the Vantage office. You will be happy you did. Happy Investing!