It’s not every day you get a “two for one” opportunity. This year, with stocks selling at a nearly 20% discounted rate and the IRA contribution deadline extended 90 days, you can take advantage of such a deal. Contributing to an IRA, either Traditional or Roth, gives you the ability to benefit from powerful tax deferral. For Roth IRA contributions (or conversions), that deferred growth continues tax free. Tax deferral on market assets bought “on sale” presents a rare chance for big gains and to later diversify and capture those gains without tax consequences.
The deadline to contribute to an IRA is normally the same as the deadline to file your tax return: April 15. Due to the current coronavirus pandemic, the federal government extended the tax filing and IRA contribution deadlines to July 15, 2020. Don’t forget…since it is already 2020, you can double your investment by putting in your 2020 contributions, as well.
If you haven’t maxed out your IRA contributions for 2019 and 2020, you still have time. The total contribution limit for IRAs in 2019 and 2020 is $6,000 ($7,000 if age 50 or older, as of 12/31/19).
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