For those fully vested in an employer 401(k) program, adding an IRA to the mix may seem like retirement-readiness overkill. But markets are volatile, and many working folks have seen their 401(k)s decrease in value and their employers cut back on contributions. Having multiple savings vehicles can help ensure a more financially stable retirement. Some things to keep in mind when considering an IRA:

• Tax benefits. Contributions to a traditional IRA now can reduce your taxable income for 2009. Qualified earnings from a Roth IRA are tax-free when you begin taking distributions.
• If you are under 50 in 2010, you can contribute up to $5000 or the amount of your taxable compensation for 2010, whichever is smaller.
• If you are 50 or older in 2010, you can contribute up to $6000 or the amount of your taxable compensation for 2010, whichever is smaller.
• The maximum amount you can contribute to a Roth IRA may be reduced, depending on your Modified Adjusted Gross Income (MAGI).
• How much of your traditional-IRA contribution is tax deductible depends on your MAGI and if you are covered by a retirement plan through your employer. Consult with your tax advisor.

Filed under: Money management tips by Shannon