Making the Most of Your Traditional IRA
- Open more than one - Traditional IRAs come with contribution caps – It's $5,500/single, $11,000/married in 2015 – but you can open as many retirement accounts as you wish until you're age 70-1/2. Depending on your household's income or if you or your spouse are eligible to participate in an employee-sponsored plan, your entire contribution may not be tax deductible.
- Go back in time - Even though the calendar reads 2015, you can still open one for 2014. Federal law allows you to allocate any funds you contribute before the tax deadline (April 15) toward the previous year's contribution.
- Change jobs, not investment strategies - IRAs can also come in handy when you're about to leave jobs and need to move your 401(k) money. If your former employer requires that you withdraw your retirement money, you can move your distribution safely from your former employer's qualified retirement plan directly into a rollover IRA and avoid owing current income tax on the distribution.