IRA Planning FAQ, Answered by Springfield Wealth Advisors

For many people, opening an IRA is the easy part. The hard part is knowing what to do next. At LaTour Asset Management in Springfield, we work with clients every day who are asking the right questions about Individual Retirement Accounts—but they’re often overwhelmed by conflicting advice, tax rules, and unfamiliar terms. We get it, and we’re here to simplify it. So, let’s tackle some of the most common IRA questions our team hears—and share insights you just won’t get from a quick online search.

Is a Roth or Traditional IRA Better?

It depends on how you want to pay taxes—now or later. A Traditional IRA gives you potential tax deductions now and tax-deferred growth. But your withdrawals in retirement are taxable. Roth IRAs flip that around: no tax deduction now, but tax-free withdrawals later (as long as you follow the rules). So, which one is “better?” That depends on:

• Your current income
• Your expected tax bracket in retirement
• Whether you value immediate deductions or long-term tax-free income

If you think taxes will be higher in the future—or if you’re early in your career—a Roth IRA might make more sense. But if reducing taxable income today is a bigger priority, Traditional may be the way to go.

Can I Have Both a 401(k) and an IRA?

Absolutely, and, in fact, many Springfield clients do. Having both gives you more flexibility. You can contribute to your 401(k) at work while funding an IRA for additional tax advantages and possibly more investment options. Keep in mind that income limits may reduce your IRA tax deduction if you’re also covered by a workplace retirement plan.

Also, even if your IRA contributions aren’t deductible, your investments still grow tax-deferred or tax-free, depending on the account type.

Should I Roll Over an Old 401(k) Into an IRA?

If you’ve changed jobs and left a 401(k) behind, you may want to consider rolling it into an IRA. Some potential benefits may include:

• A broader range of investment choices
• More control over fees
• Easier management (fewer accounts to track)

That said, it’s not automatic. Some plans offer unique benefits (like access to institutional funds or early withdrawal options) that might be worth keeping. It’s always best to compare side-by-side with a fiduciary advisor who can weigh the pros and cons based on your entire financial standing.

What Are the IRA Contribution Limits for 2025?

For 2025, the contribution limit is $7,000 if you’re under 50. If you’re 50 or older, you can contribute up to $8,000, thanks to the catch-up provision. These numbers can change, so it’s important to double-check each year.

One often-overlooked tip: you can contribute for the prior year until tax day.

What’s the deal with Required Minimum Distributions (RMDs)?

If you have a Traditional IRA, you’re required to start taking distributions at age 73. These RMDs are taxable, and if you forget or delay, the penalties are steep.

Roth IRAs, however, do not have RMDs during your lifetime—one reason many people convert from Traditional to Roth as they approach retirement. Conversions do come with tax implications, though, so timing and strategy are important. An experienced Springfield advisor—like our team at LaTour Asset Management—can help you make the most of this conversion.

Can I Use IRA Funds Before Retirement?

You can, but proceed with caution. Taking money out before age 59½ usually triggers a 10% penalty plus income tax. That’s expensive.  There are exceptions—for things like first-time home purchases or qualified education expenses—but the rules are strict, and the costs can be high if there’s a misstep.

Instead of pulling from retirement early, we often help clients explore other funding strategies that preserve long-term growth potential.

Don’t Let Your IRA Coast—Give It a Strategy Today

An IRA can be a powerful part of your retirement toolkit—but only if it’s tailored to your life and your goals. LaTour Asset Management in Springfield offers smart, long-term IRA planning that reflects everything from tax strategy to risk tolerance to future income needs. Whether you’re just opening your first account or looking to optimize what you already have, we’re here to guide you with confidence and care.

Not sure if your IRA is working as hard as it could? Reach out to our Springfield wealth advisors today at (877) 888-5724 and let’s talk about your goals.