If you are age 50 or older, there's still time (until April 17, 2007) to make special "catch-up" contributions of up to $1,000 to their IRAs for 2006. Catch-up contributions can be made in addition to regular IRA contributions. For example, the annual IRA contribution limit for 2006 (and 2007) is $4,000, but an individual age 50 or older can instead contribute up to $5,000 to his or her IRA.
How do you decide whether to execute advanced medical directives?
Catch-up contributions can have a significant impact on IRA retirement savings, as illustrated by the graph below. The example assumes a 6% rate of return, maximum catch-up contributions of $1,000 at the end of every year, maximum regular IRA contributions at the end of every year ($4,000 in 2006 and 2007, $5,000 in 2008 and beyond1), tax-deferred growth, and an investment horizon of 20 years.