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Listener Question: Is it Too Late to Make an IRA Contribution for 2011?by John Bearss, Retirement Specialist

“I forgot to make my IRA Contribution for tax year 2011. Is it too late to make the contribution now?”

No. Generally speaking, the IRS allows you to make your IRA contribution for a particular tax year up until April 15 of the following year. This rule applies to both traditional IRAs and Roth IRAs, giving you some flexibility in terms of the timing of your annual IRA contribution. In 2010 and 2011, you can contribute a total of $5,000 a year to all the IRAs you own. In addition, if you’re age 50 or older, you can make an extra “catch-up” contribution of $1,000 for year 2011.

As you prepare for future years don’t forget that you can make your annual IRA contribution in a series of payments rather than in one lump sum. For example, let’s say you want to invest the maximum amount in your IRA for 2012. You can either make a lump-sum contribution of $5,000, or you can set up a savings plan whereby you invest a fixed amount each month in your IRA. Because you’re allowed to spread your 2012 IRA contribution over a 15½-month period (January 1, 2012, through April 15, 2013), you can invest as little as $322.58 per month and still end up contributing the full $5,000.

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The Retirement Minute with John Bearss

John Bearss, Retirement Specialist (Christian Advisor Referral) 

John R. Bearss is a Retirement Specialist with the Christian Advisor Referral. He has been successfully helping clients nearing retirement generate lifetime income streams for 25 years.