Saving more for retirement is always a good idea, especially now.
Saving as much as possible, handling rollovers correctly and avoiding costly penalties are the keys to success. See if you made any of these 8 big mistakes.
In 2009, the Employee Benefit Research Institute estimated that Individual Retirement Accounts (IRAs), a cornerstone of retirement savings, sank to a median value of less than $29,000 post-financial meltdown.
That leaves many Americans working even harder to recoup their losses and stay on track to make retirement a reality. The good news is that many people can increase their saving potential simply by learning more about IRA dos and don’ts.
“There’s no question that saving through an IRA is a strategic move, but it’s not quite as simple as ’set it and forget it,’” says J.J. Montanaro, a Certified Financial Planner with USAA. “Staying aware of what to do and what not to do can really pay off, especially now, when you have the opportunity to invest and potentially save on your tax bill.”
Montanaro outlines eight of the most common mistakes IRA investors make when it comes to making the most of this retirement-saving tool:
- Thinking you’ve missed the deadline: Though 2009 is over, it’s not too late to make your IRA contribution count toward this year’s tax bill. This year, you have until April 15 to make “2009″ IRA contributions and claim eligible deductions on your tax return.
- Not contributing enough: Contributions to a Traditional IRA are tax deductible, within limits, so you can help secure your future and cut this year’s tax bill at the same time. If you’re younger than 50 years old, [click to continue…]
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