What's Happening
2 hours ago

Mark Zuckerberg Follows Elon Musk's Footsteps As Meta Reportedly Plans Major Investment Into AI-Powered Humanoid Robots

benzingabenzinga.com
3 hours ago

Do You Know How Long $1 Million Will Last If You Retire At 65? Here's A Hint – Longer Than You're Led To Think!

benzingabenzinga.com
3 hours ago

IRS Reportedly Gears Up To Lay Off Thousands Of Workers Elon Musk's DOGE Looks To Shrink The Tax Agency

benzingabenzinga.com
3 hours ago

TRADEPULSE POWER INFLOW ALERT: PALO ALTO NETWORKS INC. (PANW) MOVES UP OVER 5% AT ITS HIGH AFTER TRADEPULSE ALERT

benzingabenzinga.com
4 hours ago

Jeff Bezos-Backed Anthropic Fights US Proposal Blocking Google From Investing In AI Startups, Says It Would Benefit Rivals OpenAI, Mark Zuckerberg's M...

benzingabenzinga.com
5 hours ago

Trump Administration 'Unlikely' To Support TSMC's Control Of Intel's US Chip Factories: Report

benzingabenzinga.com
6 hours ago

Trump's 'Liquid Gold' Plan: Can He Really Make America Rich Again, or Do Oil Giants Hold the Real Power?

benzingabenzinga.com
7 hours ago

Elon Musk's Government Gig Has No Salary, No Job Title, And Plenty of Power

benzingabenzinga.com
8 hours ago

Why Altcoins Were Winning This Week

foolfool.com
8 hours ago

Russell Vought Orders Pause On All CFPB Activity, Critics Say This Gives Corporations 'The Green Light To Scam Families'

benzingabenzinga.com
8 hours ago

Prediction: Zillow Will Beat the Market. Here's Why.

foolfool.com
8 hours ago

$1000 Invested In Super Micro Computer 15 Years Ago Would Be Worth This Much Today

benzingabenzinga.com
8 hours ago

'We're Going To Find Billions' – Trump Targets Pentagon For Deep Spending Cuts

benzingabenzinga.com
8 hours ago

Here's How Much You Would Have Made Owning Meta Platforms Stock In The Last 10 Years

benzingabenzinga.com
8 hours ago

If You Invested $1000 In This Stock 15 Years Ago, You Would Have This Much Today

benzingabenzinga.com
8 hours ago

Why Siemens Stock Crept Higher on Friday

foolfool.com
9 hours ago

Here's How Much You Would Have Made Owning Regeneron Pharmaceuticals Stock In The Last 15 Years

benzingabenzinga.com
9 hours ago

This Magnificent Artificial Intelligence (AI) Stock Delivered Stellar Gains in 2024. It Can Jump Another 60%

foolfool.com
9 hours ago

Here's How Much You Would Have Made Owning American Tower Stock In The Last 20 Years

benzingabenzinga.com
9 hours ago

Why Federal Realty Investment Trust Stock Just Tanked by 6%

foolfool.com

Do These 3 Things to Max Out Your IRA in 2025

When we talk about retirement accounts, IRAs sometimes get overshadowed by workplace plans, like 401(k)s, that have higher contribution limits and employer matches. But IRAs win in terms of flexibility, and they’re a great option for those who either don’t have access to a 401(k) or want to save more than their plan allows.

Maxing out your IRA is a challenging feat, but it could go a long way toward helping you reach your retirement savings goal. Here are three steps to help you pull it off in 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Smiling person shaking a piggy bank.

Image source: Getty Images.

1. Know what maxing out your IRA means for you

The 2025 IRA contribution limit for adults under 50 is $7,000. But those who will be 50 or older by the end of the year can make a $1,000 catch-up contribution, bringing their limit to $8,000. These are the same as the 2024 contribution limits. However, they can change over time. If you plan to make a habit of maxing out your IRA, remember to check the contribution limits every year before setting money aside.

Those contributing to Roth IRAs must also be aware of income limits that may prohibit them from saving the full $7,000 or $8,000 in their IRA if they earn too much. If this is a barrier for you, you can contribute as much as you’re allowed to your Roth IRA and put the remainder in a traditional IRA, which doesn’t have income limits. Keep in mind that IRA contribution limits apply to your contributions to all IRAs, not to each account individually.

2. Evaluate your budget

Now that you know how much you can contribute to your IRA, you have to figure out how you’re going to pull it off. This might be an easy question if you naturally save over $7,000 or $8,000 per year. But for most people, it’ll probably require some careful budgeting.

You might need to look over your monthly spending and identify areas where you could cut back to free up cash for retirement. Ideally, you’ll also want to budget as much as you can spare from each paycheck. If you’re paid biweekly, you need to set aside about $269 per pay period to save $7,000 throughout the year. You’d have to save about $308 per paycheck if your goal is to reach $8,000 in 2025 contributions.

If saving this much isn’t feasible for you, consider making smaller regular payments and larger one-time payments as you’re able to. For example, if you expect a tax refund this year, you could put that money into your IRA rather than spending it.

3. Automate your contributions

Automating your IRA contributions reduces the risk you’ll forget to make them. Most IRA providers let you link a bank account to your IRA so you can set up automatic transfers on a specific schedule. If you plan to make regular contributions each pay period, you’ll probably want the money to come out on payday or the day after. You’ll still have to remember to make one-time contributions on your own.

As the year continues, check in periodically to see how much you’ve contributed to the account. Be careful not to exceed your annual contribution limit or you could face costly penalties.

If you’re not able to reach your goal of maxing out your IRA, that’s OK, too. Be proud of what you’re able to set aside. Any money you put away for the future will help improve the quality of your life in retirement.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

Related Posts

Social Security is an essential piece to most American’s retirement plans. Without their monthly benefits, some 16.3 million seniors U.S, would be living below the

The average retirement age in the U.S. was 62 in 2023, but that number’s been slowly ticking up over time. Rising life expectancies and rising

While the stock market is still thriving, some investors may be feeling wary about the future. Spiking inflation could cause the Federal Reserve to shift

There are plenty of ways to become a millionaire, like starting a successful business, being a professional athlete, or becoming a movie star. For most