Let's say you've opened an individual retirement account (IRA) that makes sense for you. And now you're wondering exactly how to fund that account. Some of the questions you're probably asking yourself include:
- Should I write a check once a year?
- Should I try to make smaller, regular contributions?
- Should I plan on using bonuses or windfalls to make contributions?
The simple truth is that, when it comes to IRA basics and funding an IRA, people often focus on what kind of account to open, without giving enough thought to how much or when to contribute to it. The amount you contribute annually depends both on your current financial situation and your retirement goals.
An online calculator like this one from our site at Allybank.com can help you see how your savings will grow over the years, making the picture clearer. A financial planner also can help you determine how much to save to reach your goals.
As for funding your account, some financial planners suggest writing a single check annually. But unless you have the discipline to be sure you won't spend that money elsewhere, consider having a certain amount deposited automatically once a month or pay period. This way, you guarantee that the contribution becomes part of your budget routine.
While many IRAs require a minimum initial deposit, an Ally Bank IRA CD or IRA Online Savings Account requires no minimum deposit to open. For more about IRA basics, such as rollovers, transfers and more, visit the IRA basics section on Allybank.com, or call live, 24/7 customer care at 877-247-ALLY (2559).
Ally Bank, member FDIC