Here’s some useful facts that you should know about your IRA. These change quite frequently so it’s always a good idea to take a look at these every year or so.
- How much can I put in?
$6,000 for 2019; $7,000 if you’re over age 50 - Are my contributions tax deductible?
If you don’t have a retirement plan at work:
Yes, regardless of your income.
If you do have a retirement plan at work:
Yes, if your modified adjusted gross income is less than $63,000 (single) or $101,000 (married). - When can I contribute?
Pretty much whenever you want, but if you want it to count for 2018, you have to make the contribution before April 15, 2019. - Can I have an IRA if I don’t work?
Typically, no. But, if your spouse works, you can open a spousal IRA and contribute to it. Same contribution limits apply. Also, you can’t contribute to an IRA if you are over age 70.5, even if you’re still working. - When can I take money out of my IRA?
After age 59.5, if you want to avoid a 10% penalty. Also, you’ll have to pay taxes on the withdrawals, regardless of age. You have to start taking required minimum distributions (RMDs) at age 70.5.
Keep in mind, there are many caveats, exceptions, and loopholes to these general rules, as is anything that involves our tax code, so please talk to your tax adviser or just shoot me an email.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
