A new year
brings a fresh start, and after 2020,
we need that more than ever. You
probably have a few resolutions for
2021. When making your list of goals
for the new year, don’t overlook your
IRA. Here are a few suggestions for
your IRA for 2021.
1.
Act sooner, rather than later.
Thinking about making an IRA
contribution? You have until the
tax-filing deadline, including
extensions, to get it done. This means
you can still make your 2020 IRA
contribution anytime until April 15,
2021. But why wait until the last
minute? Get it done sooner. By doing
so, you will not only avoid
last-minute problems but also allow
your IRA to grow faster. While you’re
at it, why not consider making your
contribution for 2021 at the same
time? Making your contributions early
can produce a surprising difference in
the amount you will have saved in your
IRA when you retire.
RMDs were
waived for 2020, but they are back for
2021. If you are required to take an
RMD for 2021, why not apply the same
“get it done” philosophy? While some
rare individuals may have valid
reasons for delaying their RMD until
the last minute, it usually makes
sense not to wait that long. A missed
RMD can result in a 50% penalty. You
don’t want to mess around here. Get
that RMD out sooner rather than later.