1. Make IRA and Roth IRA contributions early.
Make IRA and Roth IRA contributions in January rather than in December. Take IRA and Roth IRA distributions in December rather than in January.
Timing is everything. If your client gets the money into the IRA or Roth IRA at the beginning of the year, then the investment has more time to grow.
And when making distributions, take the money out as late as possible, especially with the Roth IRA. “Timing is important because you get more compounding if you do it that way,” said Mr. Keebler. “If you wait until December [to make the distribution from a Roth], the growth in that particular year will be tax free.”