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The beginning of the new year is an excellent opportunity to set a goal of maxing out your retirement account contributions before April. Make sure to incorporate IRA contributions—whether Roth or traditional—into your budget throughout the year. In 2025, if you're under 50, you can contribute up to $7,000 across any combination of IRAs. For those 50 and older, the contribution limit increases to $8,000. The earlier you invest in your IRA, the more time it has to grow via compounding.
While it's important to consistently grow your savings throughout the year, there is a prime time to contribute to your IRA, and that time is now.
Reasons to contribute to your traditional or Roth IRA today
You can contribute to an IRA for a given year at any time between January 1 and the tax-filing deadline of the following year, which is typically April 15. This means you can continue making 2024 IRA contributions until April 15, 2025. However, it’s better to start making contributions for 2025 now, with an April 15, 2026 deadline.
If you contribute to your IRA in January or February, your funds will start working for you, potentially generating returns right away. The extra months compounding could make a significant impact. Consistency is essential—even small, regular contributions can grow substantially over time.
Keep in mind that you can contribute to your IRA throughout the year. Here are some ideal times to consider adding money to your retirement account:
After receiving a bonus or tax refund. If you’ve received a bonus or tax refund, consider using some or all of it to boost your IRA. The first few months of the year often bring lump sums that can directly increase your retirement savings.
When you get a raise. If your salary increases, consider using part or all of that extra income to grow your retirement contributions. This is an easy way to increase IRA contributions over time without feeling a pinch in your regular paycheck.
By the tax deadline. You can contribute to your IRA up until the tax filing deadline (typically April 15) for the previous year. It’s a good idea to make your contributions before this date.
Above all, now is a great time to refresh your savings goals. The new year offers a clean slate for achieving your financial objectives. By contributing early to your IRA, you can capitalize on the momentum and enthusiasm of the new year. Aside from the psychological benefits, early contributions give your investment more time to potentially grow.
The bottom line is clear
If possible, aim to make your IRA contributions early in the year. The earlier you contribute, the sooner your money can begin to grow tax-deferred. Contributing in January, February, or March ensures your funds are invested for the maximum time possible.
When planning for retirement, starting early is essential (thanks to compound interest!) and diversifying your accounts helps build a strong retirement foundation. Check out our guides for opening an IRA and starting a 401(k).
