3 Steps to Boosting Your IRA Contributions

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Want to pump more money into your IRA? Read on to see how. 

The amount of money you’re allowed to contribute to an IRA account can change from one year to the next. Right now, if you’re under the age of 50, you can put up to $6,500 into an IRA per year. If you’re 50 or over, that limit increases to $7,500.

But what if you’re not getting anywhere close to maxing out your IRA contributions? Maybe you’ve been putting $100 a month into your IRA when clearly, you have the potential to be contributing a lot more.

First, let’s get one thing out of the way. Saving any amount of money in your IRA is a good thing. It means you’re doing your part to set yourself up with income for retirement. And smaller IRA contributions can go a long way over time, especially if you invest your money in assets that lend to solid growth.

But still, you may want to contribute more to your IRA than what you’re currently putting in. If so, here are some steps you can take to make that possible.

Step 1: Get on a budget

Following a budget means getting a better handle on your finances. And so if you’re eager to carve out more money for your IRA, you’ll want to know exactly where your paycheck is going month after month.

Spend a little time setting up a budget so you can get at that information, and then identify spending categories where you can cut back to free up more money. You may decide, for example, that if you’re currently spending $200 a month on restaurant meals, you’ll scale back to $100 and put an extra $100 a month into your IRA.

Step 2: Boost your income with a side hustle

Your essential bills may not leave you with much wiggle room to boost your IRA contributions. If that’s the case, look at getting a side job. Any extra income you bring in can be used to fund your IRA, whether it’s $50 a week or even $50 here and there that you earn from random gigs.

Step 3: Put your contributions on autopilot

One great thing about 401(k) plans is that they’re funded via payroll deductions. When you sign up for a 401(k), your contributions are taken out of your paychecks automatically before you get a chance to spend that money.

If you want to boost your IRA contributions, arrange for something similar. Most IRAs will allow you to set up an automatic transfer from your checking account each month. That way, you’ll have money landing in your IRA before you have an opportunity to touch it.

The more money you’re able to put into your IRA, the more money you stand to retire with. It’s that simple. So if you’re not so happy with your current contribution rate, push yourself to save more. It might take a lot of work, but you’ll be grateful for having made the effort once your career comes to an end and you have to rely on your savings to cover your living costs.

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