Couple walking on leaf covered path in park

Contribute to Your IRA Today

Now that 2020 has come to a close, it’s a good time to look at your IRA contributions. The IRS provides individuals with a unique tax planning opportunity from January 1 to May 17 (the due date for individual income tax returns).* During this timeframe, individuals are able to contribute to IRAs for both 2020 and 2021. This means your tax bill can potentially be reduced after the year has ended!

The first order of business is to make sure the IRA contribution for 2020 has been made. If not, do it! You have until May 17 this year to make a traditional or Roth IRA contribution for the previous year.

Once last year’s contribution has been taken care of, it’s time to think about 2021. When IRA contributions are consistently made at the beginning of the year rather than at the end, the funds have an extra 12 months in which to grow tax-deferred or tax-free. Over a period of years, there can be a substantial difference in the potential wealth accumulated. You may have one full extra year of growth when you contribute at the beginning of the tax year.

The chart below summarizes the 2020 and 2021 annual contribution limits to traditional and Roth IRAs.


  Annual Contribution Age 50+
2020 $6,000 $7,000
2021 $6,000 $7,000


Remember, your total annual contribution cannot be more than your taxable compensation for the year. However, if you file a joint return, you may be able to contribute to an IRA even if you didn’t have taxable compensation (as long as your spouse did). The amount of your combined contributions cannot be more than the taxable compensation reported on your joint income tax return.

To determine the deductibility of traditional IRA contributions or to see if you’re eligible to contribute to a Roth IRA, please follow these links to the IRS website:


Talk to your Stifel Financial Advisor about contributing to your IRA today!

* As a result of the COVID-19 pandemic, the 2020 federal income tax filing deadline was pushed back from April 15, 2021, to May 17, 2021.

Stifel does not provide legal or tax advice. You should consult with your legal and tax advisors regarding your particular situation.

0421.3567487.1