Have you funded your 2007 IRA yet? If not, there is still time for you to max out your investment and have it count for your 2007 IRA. The tax laws are set up to allow tax payers to contribute to IRA accounts any time from January 1st of the tax year, until tax day on the following year. For example, the dates you are eligible to invest in an IRA for 2007 range from January 1, 2007 – April 15, 2008.
Just a reminder – the maximum you can invest in a Traditional or Roth IRA for 2007 is $4,000 or $5,000 if you are eligible for catch-ups (age 50 and older). The rates increased to $5,000 for 2008, and the maximum amount with catch-up contributions is $6,000.
Recent IRA contribution limits:
| Calendar Year | Max Contribution | Catch-up Contribution, Age 50+ | Max Contribution, with Catch-up |
| 2002-04 | $3,000/year | $500/year | $3,500 |
| 2005 | $4,000/year | $500/year | $4,500 |
| 2006-07 | $4,000/year | $1,000/year | $5,000 |
| 2008 | $5,000/year | $1,000/year | $6,000 |
In my opinion, the IRA is an investment vehicle everyone should take advantage of if they are eligible and if they can afford it. The tax deferment benefits are a great way for your investment to grow without the drag of taxes slowing it down.
It is important to invest in IRAs and max them out if possible because you only get one chance to do it. Once the eligible dates for 2007 have closed out, you can no longer invest you money in an IRA for that year.
{ 3 trackbacks }
{ 6 comments… read them below or add one }
Good to know. For some reason I thought the cut off was December 31 for each year or is that the 401k? Either way good stuff!
For some reason, I always wait until April 14th to fund mine.
This year, it’s because I can’t decide whether to do a Roth or Traditional…
Girls Just Wanna, Dec 31st is the cutoff date for 401(k) contributions, but you can contribute to IRAs until tax day of the following year.
Deepali, I personally am a huge fan of the Roth IRA.
Thanks, Im so bad about not getting on the ball with this stuff, but its on my list.
Been swamped, just getting around to my reader right now and saw the Roth IRA post. Knew I had to stop and read it. Lets keep getting the word out, best thing for retirement on the market. Missing a yearly contribution, if you’re fully capable, should be punishable by law, well not quite;)
ST’d it
Ryan,
Perhaps in a future post you could share your thoughts on Roth vs Traditional? I’m leaning towards Traditional simply because I didn’t contribute towards my 403b this past year…