Got $250 a Month? Here’s How It Could Set You Up for an Amazing Retirement

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

[[{“value”:”Image source: The Motley Fool/Upsplash
In 2024, IRAs max out at $7,000 for workers under age 50 and $8,000 for those 50 and over. And in 2025, these contribution limits are staying the same.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Maxing out an IRA is a great way to set yourself up with a giant nest egg for retirement. But maxing out also isn’t an easy thing to do.If you’re 25 years old, maxing out an IRA this year and next means parting with about $583 per month. That’s a lot of money to allocate to retirement savings when you may have loads of pressing bills to deal with now, not to mention leftover student loans.The good news, though, is that you don’t have to max out an IRA to end up with a large pile of savings over time. Investing just $250 a month, in fact, could set you up for a fantastic retirement under the right circumstances.When time is on your sideSaving and investing just $250 a month for retirement may not cut it if you first get into the habit during your 40s or 50s. But if you’re in your 20s, you can build a serious amount of wealth on just $250 a month, provided you invest your money in stocks — specifically index funds that track the S&P 500’s performance.Over the past 50 years, the S&P 500’s average annual return has been 10%. To be clear, though, this doesn’t mean that the market’s performance has been an even 10% year over year. That 10% is an average accounting for years when the market did extremely well and years when it lost money.But if you invest for retirement over a long period of time, there’s a good chance that you’ll enjoy a 10% return in your portfolio. And that could go a long way.Say you’re 25 years old and you decide to begin saving and investing for retirement this month. Let’s also assume you want to retire at age 65 (which, in case you’re curious, is when you can get onto Medicare).If you contribute $250 a month to your IRA, and it gives you a 10% yearly return over that 40-year stretch, you’re looking at growing your nest egg to over $1.3 million.And the best part? That $1.3 million IRA balance is coming to you at a cost of just $120,000 in contributions. That means you’re gaining about $1.2 million simply by investing in the stock market over many years.Get started todayA $250 monthly investment could help you pull off your dream retirement. But the key is to give yourself several decades of gains to enjoy. So if you haven’t started investing for retirement yet, check out this list of the best IRAs and open one today. Or, sign up for a 401(k) plan if your employer offers one.The sooner you begin saving and investing for retirement, the more you get to take advantage of stock market returns. So even if you can’t yet swing $250 a month, save something and aim to increase your monthly contributions over time. You’ll be thankful you did later on.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

In 2024, IRAs max out at $7,000 for workers under age 50 and $8,000 for those 50 and over. And in 2025, these contribution limits are staying the same.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Maxing out an IRA is a great way to set yourself up with a giant nest egg for retirement. But maxing out also isn’t an easy thing to do.

If you’re 25 years old, maxing out an IRA this year and next means parting with about $583 per month. That’s a lot of money to allocate to retirement savings when you may have loads of pressing bills to deal with now, not to mention leftover student loans.

The good news, though, is that you don’t have to max out an IRA to end up with a large pile of savings over time. Investing just $250 a month, in fact, could set you up for a fantastic retirement under the right circumstances.

When time is on your side

Saving and investing just $250 a month for retirement may not cut it if you first get into the habit during your 40s or 50s. But if you’re in your 20s, you can build a serious amount of wealth on just $250 a month, provided you invest your money in stocks — specifically index funds that track the S&P 500’s performance.

Over the past 50 years, the S&P 500’s average annual return has been 10%. To be clear, though, this doesn’t mean that the market’s performance has been an even 10% year over year. That 10% is an average accounting for years when the market did extremely well and years when it lost money.

But if you invest for retirement over a long period of time, there’s a good chance that you’ll enjoy a 10% return in your portfolio. And that could go a long way.

Say you’re 25 years old and you decide to begin saving and investing for retirement this month. Let’s also assume you want to retire at age 65 (which, in case you’re curious, is when you can get onto Medicare).

If you contribute $250 a month to your IRA, and it gives you a 10% yearly return over that 40-year stretch, you’re looking at growing your nest egg to over $1.3 million.

And the best part? That $1.3 million IRA balance is coming to you at a cost of just $120,000 in contributions. That means you’re gaining about $1.2 million simply by investing in the stock market over many years.

Get started today

A $250 monthly investment could help you pull off your dream retirement. But the key is to give yourself several decades of gains to enjoy. So if you haven’t started investing for retirement yet, check out this list of the best IRAs and open one today. Or, sign up for a 401(k) plan if your employer offers one.

The sooner you begin saving and investing for retirement, the more you get to take advantage of stock market returns. So even if you can’t yet swing $250 a month, save something and aim to increase your monthly contributions over time. You’ll be thankful you did later on.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More