Weekly Market Recap The IMF this week proposed that the leaders of major economies consider a broad-based approach to strengthen global growth. This is based on the IMF's assessment of potential downside risks to the global economy given potential weakness in China and generally falling commodity prices. The IMF's proposal included supplementing already generally low interest rates with other initiatives, such as government investment to offer stimulus. However, the US Treasury Secretary responded he saw several economies performing well and that investors should not "expect a crisis response in a non-crisis environment". Elsewhere this week, early reads on February manufacturing activity via PMI surveys implied growth in the US and Eurozone, but at a level that suggested a loss of momentum relative to prior months.
With personal tax filing deadlines just seven weeks away on April 18th, this also means that the deadline to fund your IRA (Individual Retirement Arrangement), is also fast-approaching if you have not already funded these accounts. Generally, an IRA can be a useful tool for retirement saving because the money saved has the potential to grow either tax-free or tax-deferred. However, in most cases, there are penalties if the money is used before age 59 and a half. You should consult your accountant or attorney regarding the consequences and implications of investing and contributing to a Traditional or Roth IRA. Below are some general points to consider in consultation with your tax advisor.
If you chose a Traditional IRA, and meet the income limits, you may be able to deduct these Traditional IRA contributions from your taxes, but will typically pay taxes on it in retirement when the money is withdrawn. This can be valuable since deferring tax can allow your money to grow in a smarter tax-advantaged way. If you use a Roth IRA, the money is generally taxed at the time of contribution, but you will typically avoid paying taxes on funds that you withdraw in retirement. Roth IRAs are also different in the fact that they do not have MRDs (Minimum Required Distributions) at age 70 and a half.
If you chose a Traditional or Roth IRA you must have income under a certain level to be eligible for, and take full advantage of, an IRA. For the 2015 tax year that's $183,000 or less if you're married filing jointly or $116,000 or less for most other common tax filing statuses. Note this is a simplification of a set of complex rules, because whether you have access to a 401(k) or other retirement plan at work and other factors can also impact the eligibility and contribution calculation. If you are eligible, the contribution limit for an IRA for the 2015 tax year is generally $5,500 if under 50 and $6,500 if 50 or older.
Also, if you're self employed or work at a small business, you may want to investigate a SEP or SIMPLE IRA, because these can offer higher contribution limits than Traditional or Roth IRAs.
Notes
IMF Report:
http://www.imf.org/external/np/g20/022616.htm
US Treasury Secretary Comments:
http://www.reuters.com/article/us-g20-china-imf-idUSKCN0VX2L6
IRA Overview (CNN):
http://money.cnn.com/retirement/guide/IRA_Basics.moneymag/
IRS IRA Contribution Limits:
https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits
Disclaimer:
The views expressed are for informational purposes only and are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor or First Republic Investment Management. All expressions of opinion are subject to change without notice in reaction to shifting market, economic political conditions, and as subsequent conditions vary. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. This material may contain "forward-looking: information that is not purely historical in nature. Clients may lose money. Past performance is not indicative of future results. Investments in securities involve the risk of loss. Any tax strategies discussed should not be interpreted as tax advice and do not represent in any manner that the tax consequences detailed will be obtained. Clients should consult with their personal tax advisors regarding the tax consequences of investing. Your Portfolio Summary | $8,793.67 Your Total Assets | Ways To Improve Your Portfolio  | Increase Diversification Increase your entire portfolio diversification and lower volatility. | | | Sign in to see your full dashboard | | 
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