IRA Investing: 2009 and 2010

Just because we’ve moved on to the 2010 calendar doesn’t mean it’s too late to make a contribution to your IRA and enjoy a tax deduction on 2009’s return!
 
What you need to know:

• IRA contributions can be made from January 1 of that year until the filing deadline of your tax return
• 2009 IRA contributions can be made from January 1, 2009, until April 15, 2010
• 2009 IRA contribution limit is $5,000
• Contributions can be made all at once or in smaller amounts, as long as the total contributed does not exceed $5,000
• Please Note: If you will be age 50 or older by the end of the year, you can contribute an extra $1,000, for a $6,000 total contribution limit

Go Roth in 2010?

Although you can’t control the financial markets, you can make sure you’re getting the most from your IRA. As an investor with a Traditional IRA, you may be able to benefit by converting it to a Roth IRA, especially if you do the conversion in 2010.

There are significant changes in Roth IRA rules for 2010:

• Conversion from a Traditional IRA to a Roth IRA may be made regardless of your income
• Income tax on the converted assets may be paid in two
  installments — half each — in 2011 and 2012

Converting your Traditional IRA to a Roth IRA may also provide more flexibility with your retirement funds.

Your Lincoln Investment financial representative wants to help you embrace the future and this may be the perfect opportunity to diversify your retirement income strategy by tax type! Talk to your financial representative about the cost-benefit of converting to a Roth IRA in 2010.  

Please Note: Many individuals receive a tax deduction for their traditional IRA contributions. Unfortunately, not everyone qualifies for the deduction. If you are eligible to participate in a workplace retirement plan (such as a 401(k) plan) and your income exceeds certain levels, you may not deduct your IRA contribution. This is true even if you do not actually participate in your company's 401(k) plan. Consult your Lincoln Investment financial representative for more information.