The last-minute IRA dash before Tax Day is real

investmentnews.com:

More people are putting money into an IRA just ahead of the April 15 deadline for filing federal taxes, as market conditions have made them optimistic compared with 2022, data from Fidelity show.

It’s normal for the majority of contributions to individual retirement accounts to happen between the beginning of the year and April 15, but this year such contributions increased by 28 percent over those that were made ahead of the deadline in 2023 for the 2022 tax year.

“We’re definitely seeing more activity this year. We think it’s from the market buoying this,” said Rita Assaf, vice president of retirement products at Fidelity. “This year, more optimism has come in, and there have been some market highs.” Inflation concerns were also higher a year ago, which was partially responsible for the lower level of contributions for the 2022 tax year, Assaf said.

Most of the IRA contributions in a given year, especially on the Roth side, tend to happen during tax season, as people have a better idea of their net income and whether they qualify for Roth contributions, she said. It’s also common to use tax refunds to make contributions, she noted.

“It ebbs and flows during tax season. You’ll see it generally come in strong in the beginning, and then there’s this mad dash in the last two weeks” before April 15, Assaf said.

Over the past few weeks, IRA contributions have been up by 40 percent compared with the beginning of the year, the Fidelity data show. The number of accounts receiving contributions is up by 31 percent compared with a year ago, with a lot of that coming from younger generations. While millennials have bumped up their IRA contributions by 35 percent, Gen Z made a big move, with their numbers up by 83 percent. That’s