What Are You Losing By Not Contributing to Your IRA Today? from Informa Research Services

Business Wire, April 9, 2008

CALABASAS, Calif. -- Would you pass up free money? If you aren't contributing to your IRA, you may be (http://moneycentral.msn.com/loan/home.asp?iType=9).

If you don't plan on working for the rest of your life, an IRA is vital in helping you retire. The sooner you open your IRA, the sooner you can start building up that retirement nest egg and reaping the added tax benefits of an IRA account.

The present is a gift, so use it well. Now may be the best time to contribute to your IRA so take advantage of it and act fast! Many financial institutions offer special IRA rate promotions to encourage consumers to make deposits or open up IRAs prior to April 15.

* While rates may be nowhere near historical highs, while you wait to contribute, your money is essentially earning 0% interest. Frankly, most interest rates available are going to be better than none at all. Be sure to check convenient rate tables to see what rates are available.

* If you contribute to a traditional IRA before April 15, contributions can help reduce your taxable income (for either the 2007 or 2008 tax year), thus decreasing your total taxes owed. In addition to reducing your current taxes, you are contributing to your own retirement savings.

It's never too late to start. As long as you are working, it is never too late to start contributing to your retirement fund. In fact, the rules concerning eligible contributions for those 50 years of age or older accommodate this. If you are age 50 or older, the maximum contribution is typically $1,000 higher than for those who are less than 50 years of age.

Know your options. Another thing to consider in your retirement savings plans is the type of IRA. Just like other savings products, there are a number of different IRA options. IRAs can be termed (CD IRA), liquid (money market IRA), or variable (with a variable rate, but a fixed term). Shop for the best rates online.

Additionally, be wary of the details of each IRA because frequently, they can make a difference as to how useful each option can be for you. For instance, if you plan on retiring in less than five years, a Roth IRA would not be ideal because it requires a five year seasoning period. In other words, funds can only be withdrawn (for approved purposes) penalty-free if the account has been open for five years. Thus, if you are planning on retiring in just a few years, a traditional IRA would probably be a better choice than a Roth IRA.

Always ask the experts. The rules concerning IRA contributions and tax deduction eligibility change frequently, so consult your tax preparer to ensure you are working with the correct assumptions for your individual situation.

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