Boulder City Magazine is a monthly publication full of information about Boulder City and Southern Nevada. Boulder City Magazine features the Boulder City Home Guide, a real estate guide to Boulder City and Southern Nevada.

Money Matters
by Wendell Whitman
Edward Jones

Early IRA Funding Can Pay Off Over Time

You’ve got until April 17 to contribute to your IRA for the 2011 tax year. Once you’ve “maxed out” on your IRA for last year, why not get a jump on 2012?

Actually, you could have started contributing to your 2012 IRA as early as Jan. 2.  In fact, by fully funding your IRA each January, you’ll give your money 15 extra months of growth potential, as opposed to waiting until mid-April of the following year.

Of course, it may be difficult to come up with the full IRA contribution amount at one time. If you get a tax refund, a bonus from your employer or an unexpected cash windfall, consider using those funds to contribute to your IRA. Alternatively, you could transfer a set amount each month from your checking or savings account into your IRA.

Fully funding your IRA is a great way to help build resources for retirement. And the earlier, the better — so do whatever you can to beat that tax deadline each year.

Put Time - and Tax-Advantaged Investments - on Your Side

If you’re relatively young, and you’ve only been investing for a few years, you possess an invaluable asset: that of time. By using this time to contribute to tax-advantaged investments, you’ll help speed the day when you can enjoy a comfortable retirement.

By contributing to a tax-deferred investment vehicle, like a traditional IRA, your money has the potential to accumulate faster than it would if placed in an investment on which you paid taxes every year. Over several decades, this tax-deferred growth can make a difference in your portfolio. When you withdraw your earnings, presumably at retirement, you’ll need to pay taxes, but by then, you may be in a lower tax bracket.

If you meet the income requirements, you might want to consider contributing to a Roth IRA, which provides tax-free earnings, provided you meet certain conditions.

So take full advantage of both time and tax-advantaged investments. You’ll be glad you did.

Contact Wendell at Edward Jones

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