If you didn't max out your 2020 Roth IRA contribution, it's not too late. The deadline for making your contribution isn't until Tax Day, typically April 15. But the IRS announced that it's extending the tax deadline to May 17. That means you just got an extra month to max out your Roth IRA for 2020.
Why contribute for 2020 instead of 2021?
A Roth IRA comes with some of the sweetest tax benefits imaginable. You forgo a tax break when you make the contribution, but the money grows completely tax-free. And when you withdraw it in retirement, the income isn't taxed.
The government has a limit to its generosity, though. You can only contribute $6,000 to a Roth IRA if you're under 50 in 2020 or 2021. If you're 50 or older, you can make an additional $1,000 catch-up contribution.
Robin Hartill | USA Today