open traditional IRA?

[jediclampet]

I just learned that tomorrow is the last day to open a traditional IRA if I want to contribute for 2012.

I am 42 years old. I already have had a Roth IRA (since 2011) and I have a 401K via my employer (current balance is $72,000). I also have $27,000 invested in a taxable account. My current annual income is $94,000. I am single with no dependents.

Should I open a traditional IRA?

[Bob's not my name]

Your opening sentence is incorrect. You can contribute to a 2012 IRA -- Roth or traditional -- up until April 15 2013.

Also, you can't contribute to a traditional IRA if you've already maxed a Roth IRA. Not clear if you have, since "I already have had a Roth IRA (since 2011)" is ambiguous in at least two ways.

Also, at your income level you can't make a deductible contribution to a traditional IRA.

[jediclampet]

Thanks for your reply. I apologize for the ambiguity.

Your opening sentence is incorrect. You can contribute to a 2012 IRA -- Roth or traditional -- up until April 15 2013.

I know April 15, 2013 is the last day to contribute for 2012 but I read that the traditional IRA account must have been opened (created) by close of business on December 31, 2012.

Also, you can't contribute to a traditional IRA if you've already maxed a Roth IRA. Not clear if you have, since "I already have had a Roth IRA (since 2011)" is ambiguous in at least two ways.

Yes, I have already maxed my Roth IRA contribution for 2012. So the maximum contribution ($5000 for 2012 and $5,500 for 2013) includes traditional and Roth IRA combined? If so, I will max out the Roth and forget about the traditional IRA. Thank you!

[Bob's not my name]

I know April 15, 2013 is the last day to contribute for 2012 but I read that the traditional IRA account must have been opened (created) by close of business on December 31, 2012.

Not true. Where are you getting that?

[jediclampet]

I know April 15, 2013 is the last day to contribute for 2012 but I read that the traditional IRA account must have been opened (created) by close of business on December 31, 2012.

Not true. Where are you getting that?

From here:
http://chicagophoenix.com/2012/12/30/to ... a-or-both/

"...you can still contribute to a traditional IRA for 2012. All you have to do is have the account opened by close of business Dec. 31."

[BuckyBadger]

Is it just me, or is that entire article 1000% wrong on many fronts?

[investor1]

The rules of when you need to open the account are unimportant here. Since you have already contributed $5k to a Roth IRA for the year, you cannot contribute to a traditional IRA.

Just for the record, the information you read was bad. You have until the tax deline to open and contribute to an IRA (traditional or otherwise).

[retiredjg]

If you have contributed $5k to Roth IRA for 2012, you are done for 2012.

Unless you want to undo it and do something different.

[pennstater2005]

Is it just me, or is that entire article 1000% wrong on many fronts?

Not just you.

From the article

"Now for even more good news! In 2013 you will be able to contribute an additional $1,000 to your Roth IRA and your traditional IRA combined. You see the contribution limits have been increased from $5,000 to $5,500 for each account during 2013."

$5500 is the combined limit so an additional $500 would be the correct statement.

[Default User BR]

Good grief. Now I see why the OP was confused:

I was recently asked what else can be done when your employer does not offer a retirement plan and you are already contributing the maximum to your Roth IRA.

First of all, I want to say congratulations for contributing the annual maximum of $5,000 to your Roth IRA. Now for some good news, you can still contribute to a traditional IRA for 2012. All you have to do is have the account opened by close of business Dec. 31. You can contribute a maximum of $5,000 for the 2012 tax year and you have until April 15, 2013 to make that contribution.

This guy is claiming that you can max your Roth AND contribute to a traditional. Madness. Who is this guy? Is this some joke thing like the Onion?


Brian

[Bob's not my name]

Who is this guy? Is this some joke thing like the Onion?

If you Google chicago phoenix all the hits are chicagophoenix. It's a website nobody has ever read. And it's a very weird website.

[retiredjg]

It is hard to believe the article's author got this issue that wrong. There are a lot of things that are confusing, but this is simply not one of them. And he got it wrong in more than one way.

The author is apparently a professional in some kind of financial advisory capacity. A bit scary, but it just proves the old adage of "don't believe everything you read on the internet". That's one of the beauties of this forum - when someone screws up, there is almost always someone else who catches it and points it out.

I tried to read other articles by the author, but got blocked after reading only one. Apparently, they want a donation to be a regular reader. In that one article (about 401ks and 403bs) I didn't see any information that I thought was incorrect.

[jediclampet]

I found that article while browsing the Business section of Google News yesterday.

[bUU]

Good thing you have now found a great place to find the correct information about personal finance.

[LadyGeek]

Here's something close: Traditional IRA and Roth IRA

The reason I said "close" is because there is only one credible source on the internet for IRA information: Publication 590 (2011), Individual Retirement Arrangements (IRAs)

From here:
http://chicagophoenix.com/2012/12/30/to ... a-or-both/

"...you can still contribute to a traditional IRA for 2012. All you have to do is have the account opened by close of business Dec. 31."

It looks like the article has been corrected. "Although you do not have to have the IRA account opened by the end of the year, you should do it anyway."

[retiredjg]

It looks like the article has been corrected. "Although you do not have to have the IRA account opened by the end of the year, you should do it anyway."

I think that part was already in there (contradicting an earlier statement in the same article). The part that is (more) incorrect is saying you can fill both a Roth IRA and a tIRA each year, for a total of $5k EACH.

Or maybe that got corrected, but I can't see the article any more so I don't know.

[pennstater2005]

It looks like the article has been corrected. "Although you do not have to have the IRA account opened by the end of the year, you should do it anyway."

I think that part was already in there (contradicting an earlier statement in the same article). The part that is (more) incorrect is saying you can fill both a Roth IRA and a tIRA each year, for a total of $5k EACH.

Or maybe that got corrected, but I can't see the article any more so I don't know.

It has not been corrected. It is still stating you can fill both at $5500 each. I probably won't try that personally