May 17 deadline gives more time to build retirement plans

The April 15 deadline for federal income tax filing has been extended to May 17. This is also the new deadline for making 2020 IRA contributions.

It is easy to do. Many institutions offer the ability for e-applications with electronic transfer of funds. A new account can be opened and funded within a few days. Don’t wait until the end if you want to make sure your funds are credited properly. If it does come down to the last day, use traditional mail service to deliver your deposit if you can’t make it in person. Make sure your correspondence with the check is postmarked by the 17th.

Saving for retirement is a long-term endeavor. It requires sacrificing a bit of current lifestyle for your future. The folks nearing retirement are fully aware of the benefits of starting early. Many wish they had started saving sooner. Did you know that less than half of Americans age 55 have some retirement savings? By this low number, it is easy to see that Americans are not yet saving enough for their futures.

– The median retirement savings for households age 55-64 is only $104,000.

US Government Accountability Office, 2015 Retirement Security Report

Therefore, take advantage of this extension to get funds set aside for your future. The maximum contribution for 2020 to an IRA or Roth IRA is $6,000 with an extra $1,000 catch-up allowance for those 50 and over.

And for those just getting started, you have time on your side. The miracle of compounding over time will maximize the benefit of every dollar contributed. It may not be fun to give up an extra trip or extravagance today, but tomorrow, having diverted some to a retirement nest-egg, you’ll be in a better position financially.