A Credit Union’s Advice on IRA Contribution Limits

How to Stay Within IRA Contribution Limits but Retire Happily

When people retire, they desire financial security. They want to ensure that money won’t be an issue down the road. That’s why, even after setting up a 401k, savvy savers take an additional step. It’s called an individual retirement account (IRA), and it allows you to make higher personal supplements than with your employer. IRAs offer more investment choices at lower fees. And, even if you meet all IRA contribution limits, you’re still on the path towards a comfortable retirement

Facts about individual retirement accounts

There are some surprising facts about IRAs, some of which could go to your advantage. Take a look at the figures below.

– You can open an IRA as soon as you are an adult.

– You can have multiple IRAs but cannot exceed annual IRA contribution limits.

– The median retirement account balance for 35-44 year-olds was $37,000 in 2020.

– Most IRA contributions originated as 401k assets. The owners rolled the money into individual accounts after changing employers or leaving their job.

– IRA losses occur primarily from withdrawing funds too early, not from market fluctuations.

– Losses May Be Tax-Deductible.

How much does it take to retire?

Knowing how much to save for retirement depends on many factors. It’s wise to consider your future spending needs minus any earnings. Do you plan to move? What about children? What things will you need as you age?

The American Association of Retired Persons (AARP) provides practical advice for calculating. 

What are the annual IRA contribution limits?

For 2021, 2020, and 2019, contributions to your traditional IRAs and Roth IRAs cannot exceed $6,000 per year. If you are age 50 or older, your maximum is $7,000. Additionally, you cannot contribute more than your taxable compensation for the year. Click here to read detailed retirement guidelines from the IRS.

IRAs have built-in versatility

An individual retirement account can help with future financial needs. As IRA contribution limits change periodically, the time to start saving is now. Since these accounts offer more versatility than a traditional 401k, it’s best to speak to a financial advisor regarding your distribution options. 

IRA savings and investment services

Achieva Credit Union has options to build and maintain your wealth. Check out our savings and investment services. We offer both traditional and Roth IRAs. Furthermore, funds are insured by NCUA for up to $250,000. You’ll receive balance updates on one consolidated bank statement. To open a money market, CD, retirement, or HSA account, call 727.431.7680 or visit a local Achieva branch.

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