Investing To Reduce Taxes

Sam wants to lower the amount he owes in taxes. Should he do it by way of a traditional IRA or a Roth IRA?

QUESTION: Sam is 66 and planned to retire last year. He now owes $2,700 in taxes and wonders if he can still contribute to an IRA to reduce that?

ANSWER: You can, but I wouldn’t. You won’t save as much in a traditional IRA. I’d stick with a Roth IRA. If you’re going to invest, then invest in a Roth IRA. Don’t do it just for tax purposes, though. Tax savings is just the icing on the cake.