Consider the nest egg

Like it or not, financial adviser Mari Adam knows the days leading up to the April 15 tax-filing deadline are often the one time of year people really think seriously about their retirement savings.

"Unfortunately, it's not just a good time of year to think about money, but the only time many people do," she said with a sigh. "People are focused and pretty receptive, so we try to make the most of it."

This tax season, with higher rates still in the headlines, she's stressing the advantages of Roth individual retirement accounts to young clients and to older ones who may have retired or otherwise left a job last year, dropping their income to where they qualify to make contributions.

Roth contributions don't qualify for a tax deduction, but the money grows tax-free and is generally withdrawn tax-free in retirement.

For 2013 and 2014, workers can contribute up to $5,500 ($6,500 if they're 50 or older) to traditional or Roth IRAs. Those who want a deduction, and so contribute to a traditional IRA, must have earned less than $69,000 (for singles) or $115,000 (for couples) in 2013 to qualify for partial or full deductions if they are covered by a 401(k) plan at work. Other rules apply if you're not covered.

To make new full or reduced Roth contributions, modified adjusted gross income for 2013 must be below $127,000 for singles or $188,000 for couples filing jointly.

Also keep in mind the myriad other types of retirement savings accounts for small-business owners and sole proprietors.

Age 50-plus owners of Solo 401(k) plans can sock away an additional $5,500 in catch-up provisions on top of that, but the plans have to have been opened by Dec. 31, 2013.

"If you're eligible to fund something, even if it's only a nondeductible traditional IRA, really try to get money into the account. And if you're eligible for a Roth, do not pass up that opportunity," said Adam, president of Adam Financial Associates Inc. in Boca Raton, Fla. "We tell young people to beg, borrow and steal to get that money in there."

She said she got a call last month from a client who was being laid off with a substantial severance package.

Even though job prospects for older, highly paid workers are not encouraging, she urged him to work with his benefits department to fund as much of his 401(k) for this year as the plan allows before he leaves.

"It may be awhile before he gets another job, and even if he does, it might take awhile to get into a new plan," she reasoned.

And rather than wait another year to think about your 2014 retirement contributions, consider doubling up right now, said Ed Slott, an author and workshop presenter who specializes in retirement savings accounts.

"The minute the new year starts, you can make your contribution for that year, and that extra tax-free compounding can make a big difference" in the ultimate size of a nest egg at retirement, he said.

What about the aforementioned entrepreneurs who don't know what their incomes will be for the year and thus are worried about contributing too much and exceeding their income-based limit?

"Contribute as you go, either monthly or quarterly," he said.