Skip to content


3_16 -Sandquist (1)

As we see the snow melt away and the temperatures start to warm, we are also coming into the tax season. Unlike 2020 when we were able to delay tax preparations and filings, April is the official month most everyone completes their taxes. I am not here to give tax advice as I am not a certified tax professional, however, I would like to remind everyone, agents, and clients, it is a perfect time to make your annual IRA contributions. Not only does this provide a tax benefit to your clients, but it also provides the perfect opportunity to discuss retirement plans/options with your clients.

Some clients may be contributing to their already established traditional or Roth IRAs. Some may only be thinking about establishing a traditional or Roth IRA. Either way, these are conversations you need to have with your clients. Although we may


Scott Gilpin

Retirement Marketing Manager

not be certified financial or tax advisors, we are in the business of insuring our clients’ futures.

When discussing the tax benefits regarding IRAs with your clients, you might discuss the eligible tax breaks associated with the traditional IRAs. And although a Roth IRA does not allow for an immediate tax break, it does provide the benefit of not paying taxes on the gains when money is withdrawn, based on applicable requirements.

The client conversations may also be directed into “it is never too early to start saving for retirement”.  Folks that start now can contribute to the traditional IRA until after age 70 ½.  However, required Minimum Distribution rules still apply at 70 ½ or 72, depending on when you were born.  So long as you or your spouse earns income you can continue to make contributions indefinitely. That being said, Roth IRAs have no age limit on making contributions.

The amount for 2020 and 2021 that can be contributed to the traditional or Roth IRA is $6,000 ($7,000 if age 50 or older). One question I receive during the tax seasons is can I contribute to a Roth IRA when I am contributing to a 401K at work? The good news, having either a 401K or Roth IRA in and of itself does not preclude you from having the other account. Rather, your eligibility for both retirement accounts is dictated by the participation limits and restrictions imposed on them.  Many can participate in both.

To contribute to a Roth IRA, your modified adjusted gross income cannot exceed certain levels that are dependent upon your tax filing status.  If you earn less than $125,000 as a single filer or less than   $198,000 as a couple filing jointly, you are eligible for the full 

contribution limit in 2021. You can contribute up to $6,000 in 2021 if you are under 50, $7,000 if you are 50 or over, assuming you earned at least that much income.  Individuals who meet these income criteria can legally have and contribute to both a 401k and a Roth IRA.

In 2021, individuals qualify only for a reduced contribution to a Roth IRA at $125,000 and the opportunity to contribute to a Roth IRA ends at $140,000.  Married couples filing jointly can make a reduced contribution at $198,000 and the ability to have a Roth IRA disappears once a couple’s income reaches $208,000.  Individuals who make more than the phase-out limits cannot have both a 401k and a Roth IRA-only a 401k.

(Important) The amount you can contribute to a Roth IRA cannot exceed the taxable compensation you receive for the year.

If you would like more information about how we can help you make an annual contribution or start a Traditional IRA or Roth IRA please contact Scott Sandquist at ProducersXl.