Contributing To An Ira

April 17 was the cut-off date for contributions to a 2011 IRA. With the new spring season in May begins a new opportunity to save for the 2012 year.

HOW MUCH? For 2012, the maximum contribution for an IRA is $5,000 for those under age 50, and $6,000 for those age 50 and older.

Saving a lump sum of $5,000 may seem overwhelming. But broken down, you would need to save $416 monthly to maximize your annual contribution. This equates to $96 weekly, or about $14 per day.

ROTH OR TRADITIONAL? Did you know that you can split your contributions between a Roth and Traditional IRA? (To contribute to a Roth IRA, you must meet the IRS Contribution and Deduction Limits. For a married couple filing jointly, adjusted gross income must be below $183,000.)

For example, you could choose to contribute $1,000 to your Roth and $4,000 to your traditional IRA for 2012. However, the maximum total contribution still applies. This might be a good tax diversification strategy, given the uncertainness of future taxes.

FEES To maximize your contribution, you can choose to pay any custodial IRA fees (but not commissions) separately instead of letting your advisor pull them from assets in your account. The IRS does not consider fees subject to contribution limits.