By J.P. Dahdah, Founder & CEO of Vantage
Contributing the maximum amount to your IRA makes financial sense, but why?
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 on tax minimizing strategies, such as contributing to your IRA before April 15th. But why?
There are two reasons:
1) You must accumulate money annually to accomplish your retirement goals and
2) Decrease your income tax liability to ensure that you keep more of your income and give Uncle Sam less.
By making an IRA contribution, you accomplish both objectives.
For my article, I want to focus on the second benefit. The actual monetary savings of making a $5,500 IRA contribution is at least $1,375. That is assuming you are in the 25% tax bracket. If you are in the 35% tax bracket, you save $1,925. That is real money, folks! If you’re married and can contribute to both your spouse’s IRA and yours, you can multiply the savings by two. That’s at least a $2,750 tax savings for your household. Now remember, to take advantage of these fantastic savings, you must take action and cut a check to your Vantage IRA by April 15th.
If you can’t think of a useful way to use $1,375 of savings, I am sure Uncle Sam can so don’t procrastinate. If you are reading this and are self-employed, your options to maximize your tax savings are even more significant. You’re eligible to contribute to a Simple IRA ($12,500 limit for 2018) or SEP IRA ($55,000 limit for 2018), which offer much larger contribution limits and translate to bigger tax savings.
To make your IRA contribution, please complete and forward the Deposit Coupon along with your contribution check to our office. Be sure to add the year you wish to apply the contribution to your check and the Deposit Coupon memo. You will be happy you did.
Happy Investing!
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