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Making Your 2004/2005 Roth IRA Contributions

It’s now January 12th (no significance, you could’ve submitted it on Jan 1st.) and both financial slackers and overachievers can make contributions to their Roth IRAs. For the slackers who have yet to contribute to their 2005 Roth IRA, you have until April 17th to contribute the maximum limit of $4,000. If you’re a slacker and happen to have been around for more than 50 years, then you can put in $4,500 towards your 2005 contribution. If you’re an overachiever, you can contribute up to $4,000 to your 2006 Roth IRA contribution limit. For the the 50+ crowd, the catch-up clause permits you to contribute $5,000 to the 2006 Roth IRA contribution limit.

Some things to remember:

  1. If you mean to contribute towards your 2005 limits, make sure you notify the company managing your Roth IRA. They will, by default, put it towards 2006. If you forget, no big deal, just notify them as soon as possible and they’ll remedy it.
  2. Depending on whether you’re a lump sum believer or a dollar-cost averaging believer, you don’t have to contribute to your Roth all at once. I personally am a lump sum believer and here’s why [3].