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Monday, January 08, 2018

Seek More IRA Contributions

An IRA custodian wants to see its IRA deposits grow. Here are some suggestions.

  1. Seek SEP-IRA contributions. A person can establish and fund a SEP-IRA up through his or her tax filing deadline of April 17, 2018, plus tax extensions. The maximum contribution amount is $54,000 for 2017 and $55,000 for 2018.
  2. Seek more periodic contributions. In this day and age of web banking an IRA custodian should make it easy for a person to establish an automatic transfer from his or her checking account into either a traditional IRA or a Roth IRA. It should also be easy to stop this transfer, either temporarily or permanently. Inform the person that any contribution is made for the tax year in which the IRA custodian receives it
  3. Seek more Roth IRA contributions. As long as a person still has compensation (and not too much), a person can make a Roth IRA contribution. There is no age 70½ limit. There is no negative consequence to participating in a 401(k) plan. A person can contribute to both a 401(k) plan or a SEP-IRA and a Roth IRA
  4. Seek more traditional IRA contributions from high income clients. Now that any person with money in a traditional IRA is eligible to make a conversion contribution to a Roth IRA, more individuals will make nondeductible IRA contribution, if it is explained to them why they should make such contributions. Making a nondeductible contribution and then converting it (assumes no other funds within a traditional IRA) has the same effect as making a Roth IRA contribution. Income limits still make many individuals ineligible to make a direct Roth IRA contribution.
Posted by James M. Carlson at 9:47.27