There are many ways to fund your IRA. Your IRA is an important part of your retired financial life, funding it should be a priority. Here are a few ways that you could potentially fund your IRA. 

1. 401k Rollover

Many times, employees have a 401k at their place of employment. A 401k can be a great retirement account to have because it allows your employer to make matching contributions to your account. You can also make tax-deductible contributions to your 401k as you work. However, when the time comes to leave your job, you can no longer contribute to the same 401k. If you start working for an employer that also has a 401k, you can just roll your funds into that new account.

However, if you start working for a company that does not offer a 401k, you will have to look at other options. You could roll the funds from your 401k over into an IRA. If you do not roll your 401k funds into another type of retirement account, you will have to pay a 10% penalty on the funds and take a withdrawal. Putting your funds into an IRA will allow you to keep all the funds that you have saved and keep building for retirement.

2. Tax Refund

Another popular way to fund an IRA is to use an income tax refund. Every year, millions of Americans receive several thousand dollars worth of tax refunds. Many of them use these funds to buy big screen televisions and vacations. However, instead of using it to fund something like that, you could use it to fund your retirement account. You are allowed to put up to $5000 in your IRA every year and therefore, most people could put their entire tax refund in the account if they wanted to. This will give you a lump sum begin your investments and start earning interest. 

3. Automatic Payment Plan

If you do not have a lump sum to start funding your IRA with, that does not mean that you should not start an IRA. You can start funding it with smaller amounts along the way as well. Many people will start making monthly contributions to their IRA from their paycheck. You can set up an automatic payment plan and your employer will deduct a certain percentage of your money each month and deposit into your IRA account before you even receive your paycheck. Taking out pre-tax money does not affect your paycheck as much and you most likely will not even know that the money is gone. 

If you do not want the money to come out of your paycheck, you can set up an automatic transfer every month from your bank account to the IRA. When you make the payment automatic like this, you can just treat it like a bill and you will not even have to make a conscious decision to transfer the money. 

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