6 IRA Facts to Help Give Your Retirement a Boost

1. You have until each year’s tax-filing deadline to fund an IRA for the previous year

This means that you have until the 2025 tax deadline to contribute up to $7,000 for the 2024 tax year. Similarly, you have until the 2026 tax deadline to make 2025 contributions.

2. Contribution limits for 2024

Individuals are able to contribute up to $7,000 to their Individual Retirement Account (IRA) for the 2024 tax year. Contribution limits have the potential to increase on an annual basis to keep up with inflation.

3. Catch-up contributions are an added benefit for employees over 50

If you are over the age of 50 and you’d like to give your IRA an extra boost, you’re able to through a catch-up contribution. The catch-up contribution allows you to contribute an additional $1,000 annually to your IRA – a total of $8,000 for 2024. This extra money can add up.

4. Spousal IRAs are a great way for a non-working spouse to have a retirement account

If you have a spouse who currently isn’t earning a wage, they may have the opportunity to open their own IRA as long as you have earned income. They can contribute up to the maximum annual contribution limit, and even more if they’re over age 50.

There are a few requirements to be aware of though. For starters, you must file a joint income-tax return and the working spouse must also have an earned income of at least the amount contributed to both spouses’ IRAs.

5. SEP IRAs can be a powerful retirement solution for the self-employed

If you are self-employed, or have a consulting or freelance business on the side, you have access to a SEP IRA. The advantage of the SEP IRA is its higher contribution limits. A SEP IRA allows you to contribute the lesser of $69,000 for 2024 ($66,000 for 2023) or 25% of your net self-employment income after accounting for taxes and the income reduction from the SEP contribution itself.

6. Roth IRAs may be an option even if you earn more than the income limit

Roth IRAs are funded with after-tax contributions, your money has the potential to grow on a tax-deferred basis, you can take a qualified withdrawal tax-free and you are not required to withdraw the money at age 73.^[1] But you can only contribute to a Roth IRA if you’re a single tax filer for tax year 2024 earning less than $161,000 or a joint tax filer earning less than $240,000.

If you exceed these income limits, you might still have a chance to open a Roth IRA. Current IRS regulations allow investors to convert a Traditional IRA to a Roth IRA, regardless of income level (paying taxes now). This can afford you the benefits of tax-free distributions down the road, and can even help you avoid the need to take Required Minimum Distributions when you reach age 73.^[2]

Please note, contributions and tax deductibility are subject to income limits, your tax filing status and whether you (or your spouse, if applicable) are covered by an employer sponsored retirement plan. PNC Investments and its affiliates and vendors do not provide legal, tax or accounting advice.

Contact PNC, today

When it comes to investing for retirement, there’s no one-size-fits-all solution. For more information on IRAs, or to discuss your personal plans for retirement in more detail, contact PNC Investments today at 855-PNC-INVEST.

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Important Legal Disclosures and Information

1. Under recent SECURE Act legislation, the age required to begin taking RMDs has changed from age 72 to age 73 beginning in tax year 2023. Consult your tax and/or legal advisor if you need further guidance in this regard.

2. If you fail to take your RMD on time, a 25% tax penalty may be applied to the amount of any shortfall.

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