Don’t Forget: Make your tax-free IRA catch-up contributions by Monday April 18th!
Retirement. In theory, it’s a time for hard-working Americans to kick up their feet and live out their golden years in leisure, as a reward for a lifetime of smart savings decisions. In reality, a mere 52% of non-retired Americans say they’re saving enough money for retirement that will yield a desirable standard of living.
So, where’s the disconnect?
The fact is, many Americans aren’t maxing out their Individual Retirement Accounts (IRAs), even when they could be. One of the biggest (and most common) mistakes made by investors is failing to make a catch-up contribution to their IRA each and every year.
What are IRA catch-up provisions?
Essentially, these catch-up provisions provided by the government allow workers aged 50 and up to save additional tax-free money for retirement every year. While traditional, Roth and SIMPLE IRAs all have their own standard annual contribution limits, catch-up contributions allow you to invest an additional amount into your IRA each year. For more information on what these dollar amount limits are, check out this summary from the IRS.
Why do catch-up contributions matter?
That extra investment year after year can turn into huge retirement savings over time, as interest compounds. As it always goes with investments, a little bit of money today can turn into a whole lot of money (and a higher standard of living) down the road.
This type of knowledge is the defining line between someone who’s well on their way to a happy and financially secure retirement, and someone with no clear end in sight. What side of the line will you be on?
The final day to take advantage of these IRA catch-up provisions for 2015 is next Monday, April 18th, 2016. Don’t miss the deadline, invest in your future retirement today!