The clock is ticking for all 2019 IRA cash contributions. April 15, 2020 – the last day to maximize adding funds to your IRA to ensure it counts for 2019. Don’t wait and end up missing out.
The IRS limits the amount you can add to a tax-advantaged IRA each year. So, the date is approaching to make a 2019 and 2020 contribution congruently, which doubles the amount you can add to your IRA!
Also, for those approaching the magic age of 59 ½, by making a 2019 contribution to a new Roth IRA, it starts the 5-year clock date back to January 1, 2019. Therefore, the 5-year rule to withdraw gains tax-free is now only 3-years and 8-months. Getting to add more money AND lowering the 5-year rule, sounds like a win-win situation to me!
Remember, you can pull your Roth IRA contributions any time without taxes or penalties as they are after-tax funds. However, to take your GAINS out tax-free, the account must be established for 5-years, and you must be over the age of 59 ½.
Just about anyone can contribute to an IRA on a yearly basis. As far as NEW contributions to IRAs, funds must come in as USD per IRS rules.
If you are over the income limits to contribute to a Roth IRA directly, you can still contribute to a Roth IRA through a conversion process known as a Backdoor Roth IRA.
So friendly reminder to those that have not yet finalized their 2019 contribution. Get it moving now so that you don’t end up kicking yourself later.