rockville financial consulting

1st Quarter 2018

As the 2017 tax filing deadline approaches, many are preparing to take advantage of IRA contributions.  As advisors, we often hear the question “Should I contribute to my Traditional or Roth IRA?”  To many of our clients’ chagrin, we usually answer this question with more questions:

  1. Do you qualify to contribute to a Roth IRA? According to, a married couple filing jointly would need to have a Modified Adjusted Gross Income (MAGI) of less than $186,000 to make a full Roth IRA contribution for the year 2017 ($118,000 for a single person).  If you do not qualify, a Traditional IRA may be your only choice.
  2. What is your investment time horizon? Since Roth IRA contributions are not tax-deductible, the primary benefit of a Roth IRA is the ability to withdraw earnings tax-free after age 59 ½.  If you only plan to have the account for a few years before taking withdrawals, you’re not leaving a lot of time to allow earnings to accrue.  For this reason, Roth IRAs are generally more appropriate for investors with longer time horizons (5+ years).  Investors with shorter time horizons may find more value in a deductible contribution this year.

We are happy to work with you and your CPA to determine which retirement savings vehicle best fits your needs.

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Kim D

For over three decades, Financial Services Advisory has helped clients manage their money through good times and bad. We customize an individualized approach for every client looking to invest while focusing on protecting what you have worked so hard to create. When working with FSA, you will find our goal in managing investments to help you protect your wealth while growing it wisely.

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